Van Lanschot Kempen Investment Management UK has announced it has appointed State Street Global Advisors (SSGA) to manage its Liability Driven Investment (LDI) strategies.
Under the terms of the agreement, SSGA will manage a multi-billion pound portfolio on behalf of Van Lanschot Kempen’s pension fund fiduciary management clients in the UK, using a comprehensive investment solution which enables greater flexibility, efficiency and control over portfolios for clients of all sizes, freeing many from the potential limitations of pooled funds for the first time.
The firm writes that the partnership reflects the changing LDI landscape and the need to develop new approaches for management of LDI portfolios. Among other drivers, the Bank of England becoming a net seller of gilts at the same time as issuance is increasing has prompted many pension schemes to review their approach to LDI, the firm says.
The individually segregated solution, jointly designed by Van Lanschot Kempen and SSGA, and powered by the market leading Charles River Investment Management Solution (CRIMS), will help clients navigate this new economic landscape, manage liquidity, reduce their funding level volatility, and implement their investment strategies in a transparent and cost-effective way.
Critically, the solution will utilise real time data and regular updates from portfolio managers and advisers with the aim of ensuring the highest standards of governance across portfolios, plan for a range of scenarios and the operational resilience of pension schemes.
Nikesh Patel, Head of Client Solutions & Chief Investment Officer at Van Lanschot Kempen, says: “The LDI landscape has fundamentally changed and we believe a more robust approach is needed than has been available to investors historically. In our conversations with trustees of schemes of all sizes, we have noted a desire for an investment solution which provides greater liquidity control and dynamic management to allow schemes to plan for a range of scenarios in an uncertain macroeconomic environment. This LDI investment solution, which we have developed in partnership with State Street Global Advisors, will allow us to be even more responsive and deliver stronger investment outcomes for our LDI clients.”
Alistair Byrne, Head of UK Institutional Distribution, at State Street Global Advisors, says: “We are delighted to deepen our partnership with Van Lanschot Kempen with this important LDI mandate. We have been investing in our people and technology and look forward to supporting Van Lanschot Kempen in growing its fiduciary management business.”
