Liability driven investment
Financial investments involve an element of risk. For further information, please see the risk warning section.
Managing LDI portfolios for institutional investors is a cornerstone capability to delivering outcome oriented solutions, given the importance of effective understanding and management of key risks. Aviva Investors has been managing LDI strategies for pension and insurance clients since the early 2000s.
Liability Driven Investments (“LDI”) allow institutional investors to manage the interest rate and inflation risk inherent within their liabilities. This is typically achieved by constructing a bespoke portfolio using Government Bonds, Swaps, Repos, as well as other fixed income assets to match the interest rate and inflation sensitivity of the future liability outgo of our clients.
Our LDI team has a long history of managing large complex LDI portfolios for pension schemes and insurers in an ever evolving market environment. We are experienced in managing LDI mandates with varying levels of discretion, from narrow passive strategies to a fully discretionary active approach.
A key feature of our proposition is the ability to combine our broader capability in alternative income and buy and maintain credit with LDI, to build holistic matching portfolios designed to hedge the market value of the liabilities, as well as meet future cashflow obligation.
Why Aviva Investors for LDI?
Our approach to LDI is centred on:
1. Adding value within an LDI portfolio – Generating outperformance above a liability benchmark through diversified sources of alpha, within a risk controlled framework leveraging our insurance heritage
2. Client focused - Tailored mandates with reporting and servicing customised to each client’s need
3. Holistic approach to LDI – Our approach can incorporate all types of cashflow generating assets (e.g. alternative income, buy and maintain credit) into your liability hedge to enhance returns