DB Solutions

Our DB offering provides trustees with a robust portfolio modelling service to match your targeted return, yield and volatility objectives. We work within your strategic asset allocation to deliver an efficient portfolio at each step of your de-risking journey, ensuring the optimal matching of assets with the profile of your liabilities.

As standard, we provide additional monitoring and implementation services designed to assist pension schemes in the efficient de-risking of their assets, taking advantage of market opportunities or improvements in solvency.

We work seamlessly with you the trustee, and your adviser, to achieve the most cost-effective solution. An overview of our approach is summarised below:

The key advantages of the service are:

• Strong governance – we address strategy and execution separately, enabling trustees to focus on key decisions.
• ILIM’s partnership approach is designed to ensure all relevant expertise is exploited, and conflicts of interest are avoided.
• An intelligent overlay, because opportunities to de-risk from equities do not always coincide with favourable bond yield levels.
• Our proven ability to execute promptly while minimising transaction costs. 
• An automated process with strong controls and a low risk tolerance.
• Transparency of position, valuation and costs and bespoke reporting.
• Investment solutions that provide diversification across asset class, investment style and managers.
• Volatility and drawdown managed through innovative investment choices.

Our DB360°solution is a comprehensive product & service offering, centered on delivering on our clients’ key objectives. 

ILIM will help you to identify and implement a unique solution for your DB Scheme using the following approach:

Step 1: Determining trustee requirements and preferences

The first stage in the process involves liaising with the trustees and their advisors to set parameters, such as the scheme’s required rate of return, preferences regarding risk appetite and liquidity, as well as implementation parameters. Our partnership approach to this process emphasises collaboration between all relevant parties.

We work with trustees and their advisors to assess the following:

Step 2: asset & liability modelling and strategy development

Asset and liability modelling is a core part in identifying how solvency volatility can be reduced. Importantly, our approach develops solutions that are specific to the duration of the scheme’s liabilities, rather than utilising generic spot rate duration funds. Based on an analysis of the scheme’s liabilities and current investment portfolio, we will work with you and your advisers to develop a bespoke investment strategy that supports this objective.

Our Quantitative Strategies Team is an integral part of DB360°. By analysing your specific scheme data (e.g. cash flow requirements), the team establishes the key risks the pension scheme is currently exposed to. We then develop a strategy to reduce those risks, and to manage the impact of these risks on member benefits and the company balance sheet.

The team is composed of quantitative analysts and mathematicians. The team reviews asset classes, their interactions with one other and how cash flow, risk and return requirements can be best matched, through optimised growth and defensive portfolios.

Whether you are looking to de-risk and move into a matched portfolio, or are just trying to get your assets to work harder for you, performing asset and liability modelling analysis is essential for your scheme.

Your portfolio manager will work with the Quantitative Strategies Team to develop an appropriate growth asset and liability matching strategy for your scheme. Diversification across asset class, investment style and manager is available, to ensure that we deliver a tailored solution to meet your individual preferences. Solutions are drawn from the following universe of all available asset classes and strategies including: 

 Step 3: intelligent de-risking

As a scheme’s solvency improves through asset growth or declining liabilities, a systematic repositioning of the assets occurs in the form of a trigger point strategy. The trigger point strategy for the scheme is designed to signal appropriate exit points from the growth portfolio. Rather than allocating directly to the matched bond portfolio, our approach also identifies appropriate entry levels into defensive assets. This approach includes temporary tactical allocations to cash or short-dated yield funds, awaiting more attractive entry points into matching assets.

Our integrated service provides daily solvency, market and daily trigger-point monitoring with the execution of de-risking steps within 24 hours of a trigger being reached. As you would expect from ILIM , the execution of asset switches is carried out efficiently and with the aim of minimising costs. The process is subject to strict daily and weekly review and controls.

Our Defined Benefit team collaborates with teams across ILIM, helping our clients achieve their investment goals. Our focus is on providing you with support across our full range of funds and services. To start or continue your conversation with us, please contact one of the team.

Key Contacts