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Why the move to liability-driven investment?

25.04.2012
By RisCura

The 'old school' approach to setting a pension fund’s investment strategy has usually been to set a target return and then structure the assets to try to match the actual performance with the targeted performance. This approach didn’t fully recognise the importance of meeting the fund’s future pension obligations. The success of the investment strategy was only measured on whether the portfolio outperformed some market benchmark and not a liability benchmark based on the present value of the pension fund’s obligations or liabilities as they change through time.

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.