March 16, 2017
Conning Launches Interactive LDI Tool for
Pension Plan Sponsors and their Advisers
HARTFORD, CT – March 16, 2017 – Conning, a leading global investment manager serving institutional investors, today announced the launch of a free Liability-Driven Investing (LDI) tool, the Conning Pension Risk Analyzer (Analyzer), on its website. This interactive tool allows pension plan sponsors and their advisers to examine the potential risks and rewards associated with their plan's asset allocation.
The Analyzer helps users evaluate how different investment strategies, including a customized LDI framework, might benefit their plan during adverse market conditions. Additionally, the Analyzer illustrates a process for evolving the plan’s current investment strategy toward a target strategy based on downside risk mitigation, thereby increasing the likelihood of protecting the plan’s funded status.
“Investment and risk management objectives vary across plan sponsors, as do understandings of what an LDI approach can offer. The Conning Pension Risk Analyzer aims to address both of these challenges by allowing plan sponsors and their advisers to navigate through a self-guided and easy-to-use system that is similar to many individuals’ online 401K financial planning tools,” said Owais Rana, a Managing Director and Head of Investment Solutions at Conning. “The merits of adopting a customized LDI framework will be evident as users walk through our six-step process.”
“It is especially important for plan sponsors to review the Analyzer’s concise assessment of how well-matched a plan’s assets are to its liabilities. Our experienced LDI team is available to provide further guidance on structuring and implementing a customized LDI strategy for plans of all sizes, whether they are intending to implement a pension risk transfer or maintain a closely matched strategy,” added Rana
Conning is deeply committed to working with pension plans and their advisers to offer LDI strategies tailored to client needs. In January 2017, Conning launched an innovative pooled fund suite focused solely on for U.S. corporate pension plans. This pooled fund suite, structured as a Collective Investment Trust (CIT) vehicle, offers pension plans the option of customizing an LDI strategy by mixing and matching the funds in order to effectively achieve specific hedging objectives. The CIT can also be used by plans in the context of completion management, including credit spread completion, depending on where plans are in their de-risking glidepath.
Conning’s LDI team leverages three decades of combined experience managing and developing customized asset-liability focused investment mandates, deep expertise in the U.S. credit markets, and the company’s award-winning risk modeling software.
Conning has made the Analyzer available at a time when the pension industry is directing a greater portion of its governance budget toward pension risk management. Industry reports show that at the end of 2016, the average funding level of U.S. companies’ defined benefit pension plans was around 80%. Despite strong equity returns since the financial crisis, many pensions plans have struggled to recover from their underfunded positions, mainly because of declining long-dated interest rates.
ABOUT THE CONNING PENSION RISK ANALYZER
This Analyzer is available to pension plan managers and their advisers at no cost at /pension-plans/liability-driven-investing. To customize the results, a plan sponsor or consultant simply enters basic information about their plan’s liabilities and asset allocation. The Analyzer then simulates the next year’s range of financial outcomes using Conning’s GEMS® Economic Scenario Generator software, and identifies the plan’s Funded Status Value at Risk (VaR). Using real, plan-specific data, the user can then experiment with changes to its portfolio to see how allocations between growth and hedging strategies might affect the plan’s risk profile.
Conning (www.conning.com) is a leading global investment management firm with nearly $109 billion in global assets under management as of December 31, 2016*. With a long history of serving the insurance industry, Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, award-winning risk modeling software, and industry research. Founded in 1912, Conning has offices in Boston, Cologne, Hartford, Hong Kong, London, New York, and Tokyo.
*As of December 31, 2016, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited, and Cathay Securities Investment Trust Co., Ltd. ("SITE"). SITE reports internally into Conning Asia Pacific Limited, but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning entities.
GEMS® is a registered trademark of Conning, Inc. Copyright 1990-2017 Conning, Inc. All rights reserved. GEMS® is exclusively published, licensed and owned by Conning, Inc.
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