Institutional investors operate in a complex environment. Increased regulation and record-low interest rates have made it very challenging for pension funds and insurers to achieve the returns needed to meet their liabilities.
Given the challenges facing investors, it is important to have clarity about your overall investment vision. Before an investment strategy is adopted, institutional investors first need to articulate their investment beliefs. This includes considerations such as:
- How dynamic and opportunistic you want your strategy to be. One with a stable portfolio working with a limited risk budget? Or one with a higher risk tolerance which will take more substantial positions when investment opportunities arise?
- Your views about active versus passive investment. Do you believe active asset management can add value? And in which markets?
- Which investment processes should be managed in-house. If you believe in active investment, can your organization manage – and does it want to manage – the additional internal processes that accompany such a commitment?
- To what extent you want to hedge risks within your strategy and how dynamic you want your hedging policy to be. What are your views on using derivatives and how complex should your derivative strategy be?
- Your beliefs regarding sustainability and responsible investment. For long-term investors, sustainability should be a central investment theme. But how will this be expressed within your portfolio and which assessment criteria will you adopt?
- Your assumptions about future economic developments. How will you express those assumptions in your strategy and how frequently will you adjust your portfolio to economic developments?
Assist you in translating your core investment beliefs
Our professionals have wide-ranging experience helping institutional investors to articulate their investment choices and understand the implications of those decisions. The Investment Solutions Center can assist you in translating your core investment beliefs into a final investment strategy, strategic asset allocation and investment mandates. We can also help you assess your current portfolio to ensure your investments are consistent with your investment goals and beliefs.
Our research combines the latest theory with practical implementation ideas
The Investment Solutions Center also regularly publishes its own research and collaborates with a wide network of external experts on a variety of investment topics of interest to institutional investors. Our research combines the latest theory with practical implementation ideas to ensure that new concepts can be applied to your strategy. We believe that by sharing our latest thoughts on developments that affect the asset classes within your portfolio, we can have more valuable conversations with you and be a better sparring partner.