Liability Driven Investment (LDI) is an investment approach that seeks to ensure sufficient assets to meet all liabilities, both current and future. It is particularly useful for defined benefit pension funds where liabilities shift over time.
LDI has grown significantly in the UK market and asset managers have set up dedicated teams to develop LDI solutions. Frequently these teams have recruited individuals from pension consultancy firms because of their in-depth understanding of liabilities. Plenum has an established network not only in the asset management space but also the consulting world providing access to the best talent in this market.
The UK market has a hierarchy of LDI providers with three clear market leaders and a host of smaller players. However,LDI is increasingly viewed as a low margin business with high barriers to entry. Increasingly, established LDI providers are utilising their LDI propositions to introduce clients to more lucrative Multi Asset Class Solutions.
Plenum has worked with LDI teams to identify both technical solutions specialists, such as senior structurers, as well as client relationship managers and distribution specialists.