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Why LDI should be on every trustee’s and adviser’s radar

17.04.2025
By RisCura

Liability-Driven Investment (LDI) is more than a mere strategy; it represents a commitment to preserving dignity in retirement. This is the central message of a recent Citywire article featuring insights from RisCura’s Petri Greeff.

The article, titled “Why LDI should be on every trustee’s and adviser’s radar”, delves into how LDI inverts the traditional investment approach by aligning investment strategies with future liabilities, and underscores its growing importance in both defined benefit and defined contribution schemes.

Many don’t look beyond the member’s fund credit,’ said Greeff. ‘But that’s just one part of the puzzle. Advisers can help clients think more deeply about income, not just capital.

The article highlights the importance of an outcome-focused approach. In an environment where retirees face increasing longevity and market volatility, traditional investment strategies may prove inadequate in securing long-term financial stability.

LDI offers a solution by focusing on the specific future liabilities of pension funds and aligning investment strategies to meet those obligations. This approach contrasts with traditional methods that primarily aim to maximise returns, often exposing retirees to greater risk.

By aligning assets with liabilities, LDI helps to ensure that pension funds possess the necessary resources to meet their future obligations, providing greater certainty for both trustees and beneficiaries. This is particularly crucial in defined benefit schemes, where the pension fund is responsible for providing a specified level of retirement income. However, the principles of LDI are also increasingly relevant in defined contribution schemes, as retirees seek to manage the risks associated with converting their accumulated capital into a sustainable income stream.

The article showcases how LDI can help trustees and advisers secure improved retirement outcomes for their clients. It emphasises the need for a more holistic approach to retirement planning, one that considers not only the accumulation of capital but also the generation of a reliable income stream throughout retirement.

Read more here: Why LDI should be on every trustee’s and adviser’s radar

For more information on RisCura‘s insights into LDI and retirement planning, please contact Monika Kraushaar, Head of Investment Advisory at RisCura

Author

  • RisCura is a global financial services firm with more than $200 billion in assets under advice and reporting. We partner with institutional investors across emerging markets, bringing specialist investment management, advisory, and analytical expertise to help clients make informed, long-term investment decisions.

    Guided by our “Invest with Care” philosophy, we recognise that investment decisions are not only about money and numbers, but about the people and futures they affect. Through tailored solutions, deep research, and a client-centric approach, RisCura helps investors navigate complexity, manage risk, and create lasting value for their beneficiaries.

    RisCura is known for its focus on liability-driven investing, responsible investment practices, investment transparency, reliable valuations, independent risk assessments, performance standards, and long-term investment outcomes.

    Our capabilities span investment advisory, investment management, investment analytics, institutional platform services, and alternative investment services. Across these areas, we combine consistent methodology and proprietary tools with deep local insight, recognising that each market is unique while responsible investing remains universal.