Over the years, as institutional investors have implemented newer and more dynamic private markets strategies in their portfolios in an effort to boost investment returns, they have also faced a timing conundrum. Secondaries have the potential to help address this challenge. We review their potential advantages and show how they can be broadly used as an effective portfolio management tool for investors of all types and sizes.
The private equity secondary market can offer investors efficiency and access that is unavailable elsewhere in the private investment universe. We believe partnering with a knowledgeable and experienced investment team is an important part of finding success within this dynamic and evolving asset class, and we answer seven key questions reviewing private equity secondary funds and their benefits.
In more uncertain investment environments, pension plan sponsors should remember that down markets can create value opportunities for well diversified portfolios. This paper discusses how recent developments in the fixed income market may be able to help total return-seeking pension plan portfolios, frozen plans looking to de-risk, and open or recently closed pension plan portfolios.
While many options exist as a result of the Special Financial Assistance (SFA) program for underfunded multiemployer pension plans, a plan-specific, holistic approach that combines multiple investment strategies is most likely to generate optimal outcomes. This paper provides a guide to plan sponsors as they seek to make the most effective use of their SFA program capital.
The American Rescue Plan Act of 2021 included substantial relief funds for the most troubled US multiemployer pension plans through its Special Financial Assistance (SFA) program. This paper looks at how multiemployer plans have a unique opportunity to improve their solvency through 2051 and beyond by optimizing how they invest both SFA relief funds and their existing plan assets.
Most defined benefit plans–including public, multi-employer, and even frozen corporate plans–can benefit from private investment (PI) strategies. Despite this, many plan sponsors still abruptly cut off PI commitments or do not optimize their usage as the plan matures. This paper explores how plan sponsors should utilize PI strategies within their toolkit and customize their composition over time to reflect a plan’s evolving goals.
Blockchain technology and digital assets could disrupt the way many of the companies in a pension plan’s current investment portfolio do business. Pension plan sponsors can benefit from an increased understanding of blockchain technology and its potential portfolio implications. In addition to providing a general overview of how blockchain technology and digital assets investments work, this paper answers questions on related challenges and developments for plan sponsors to consider.
The Pension Risk Transfer (PRT) market has grown markedly over the past decade as recent regulatory changes, coupled with greater pricing competition from insurers, have increased the popularity of PRTs. However, for many plan sponsors, PRTs are not the best solution. Plan sponsors should fully understand the potential impact of a risk transfer transaction on their plan, specifically as it relates to three dimensions explored in this paper: funded status, risk reduction, and future costs. Without this understanding, the hidden cost of these transactions may go unnoticed.
Many defined benefit plans sponsors may be denying themselves valuable opportunities to generate additional returns by overestimating their liquidity needs. Targeting a liquidity supply/demand ratio of 2x–3x can help portfolios tolerate periods of market stress.
In just the last five years, total US institutional assets under management by Outsourced Chief Investment Officers has continued to grow steadily, and is projected to reach nearly $2 trillion in 2021.