GLOBAL - An ex-Morgan Stanley staffer has set up PensionsFirst, a company managing longevity exposure and market volatility risks for defined benefit (DB) pension schemes.
Chaired by Amelia Fawcett, former vice chairman and chief operating officer of Morgan Stanley’s European operations, the firm aims to fill the current void between bulk annuity and LDI solutions.
PensionsFirst has developed a proprietary rating methodology for longevity securities, supported by a risk management platform that is able to analyse all scheme specific risks, including longevity. This will allow it to issue longevity bonds, tailored to each scheme’s individual liabilities.
The firm claimed the solution would offer cost effective, scheme specific investment solutions, along with access to a new source of scaleable capital and immunisation of all risks.
Fawcett said: “Changes in regulatory and accounting rules now require DB liabilities across the world to be supported with capital and have forced corporate sponsors to face the inherent financial volatility of DB.
“The question remains as to where this capital can be sourced most efficiently and how best to manage the volatility. We believe there is an enormous demand for a solution offering transparently-priced investment products which address all DB risks.”
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