CANADA - State Street Global Advisors (SSgA) has won a C$125m mandate to implement its first Canada-based liability driven investment strategy (LDI).
SSgA’s chief investment officer Gregory Chrispin exclusively revealed the news to Global Pensions during a review of the country’s latest institutional trends.
Chrispin declined to name whom the mandate would be run for, but said the strategy would be based in Montreal as the company extended its presence in Canada.
He said: “LDI is not something you can buy off-the-shelf and you have to do a lot of analysis. The market is moving more towards quantitative and we are very much involved in developing those strategies. We are in a low interest rate market and the equity market is not producing the returns we were used to. Pension funds want to defuse their liability profile.”
The company’s Canadian LDI strategy comes after it recently revealed plans to develop synthetic hedge funds, which could be made available to institutional investors.
Professor Guus Boender from the Free University Amsterdam recently warned Global Pensions readers to approach LDI with caution.
Boender said the main shortcoming of most LDI strategies was that they approximated the pension liabilities through the cash flows resulting from the current pension rights.
Tenders for first-time fiduciary management mandates will be mandatory, must be conducted on a closed basis, and will apply to any mandate for over 20% of a scheme's assets, the Competition and Markets Authority (CMA) has confirmed.
Daniel J. Graña of Putnam investigates how US's trade war with China will affect emerging market equities
Aviva Investors explains the growth and protection benefits investors gain from real assets
Royal London has announced that group chief executive Phil Loney has decided to stand down by the end of 2019.