15 September 2021
Why ESG is essential for cash flow matching success
With defined benefit (DB) pension schemes maturing and many turning cash flow negative, cash flow matching portfolios are increasingly important. Fiduciary managers must lead in ensuring environmental, social and governance (ESG) factors play an increasingly integrated role in the process and portfolios of cash flow matching strategies. Integrating ESG is a vital evolution, not only in delivering on trustees’ regulatory obligations but in ensuring that portfolios are more resilient and value additive. Here, we set out why integrating ESG matters, and what we consider when identifying managers to help us provide bespoke cash flow matching ESG to pension schemes.
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15 September 2021
The top concerns trustees have for members approaching retirement
There are many risks around accessing pensions which have become increasingly complex and uncertain. With this in mind, WEALTH at work conducted some research with the Pensions Management Institute to look at this in more detail and have revealed the results.
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15 September 2021
ESG engagement: going above and beyond investor letters
Over the past couple of decades, responsible investing has evolved from a niche area of our industry to much more mainstream. Engaging with companies on environmental, social and governance (ESG) issues is a huge part of what it means to be a responsible investor, because using our influence in this way can help drive real, positive change for people and the planet. We recently discussed ESG engagement with three of the companies we engage with to understand how they’ve witnessed engagement evolve and to get their opinions on what good engagement looks like.
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15 September 2021
Accessing alternative assets to build diverse portfolios
Assets under management in private markets have grown exponentially in recent years, hitting $4.74 trillion by the end of 2020*, and growth is set to continue on this trajectory**. It is a growing universe, but one which is out of reach for most investors, as assets are generally held in long-dated funds with no redemption rights and large minimum investment limits.
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15 September 2021
Gold – creating opportunities from risks
Any path to recovery is beset with challenges, something exemplified by financial markets’ performance so far this year. The first six months of 2021 saw swings in asset prices, sentiment and optimism as the global economy continued its quest for a much-needed recovery. Some say we are hitting an inflection point with growth, inflation and policy stimulus potentially peaking, but uncertainty remains high.
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15 September 2021
Accessing future cash flow to understand the journey plan
Ultimately, future cash flows of the sponsor pay pension contributions. A largely historical approach to covenant assessment, focused on past performance and the balance sheet, can misjudge the level of covenant support available or even misrepresent the risks that a scheme faces. A forward-looking approach is an essential part of a robust covenant assessment framework.
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