Investment Challenges and Decisions
Analysis and Integration of Investment Issues
Even though pension plans and foundations are both liability managers, the asset side of the balance sheet tends to get most of the attention.
The required rate of return for liability managers was set in an environment where expected investment returns were higher than they are today. Clearing that hurdle now demands asset managers take more risk than they did when the return hurdles were set.
Investors are reaching out along the risk horizon to meet required returns, and this demands a complex of issues be recognized and trade-offs be made.
SSC identifies the top of mind investment issues as investors attempt to meet their liabilities and examines such issues as:
- The application and optimization of leverage and the management challenges it creates
- Liquidity:
- What is it?
- What do you need it for?
- How much do you need?
- What are the expected returns to liquidity?
- Illiquidity:
- What role does illiquidity play in your portfolio and asset allocation?
- What premium should you receive for taking illiquid positions?
- Public versus private asset allocation:
- Why private assets?
- Do they actually deliver on expectations?
- What role do they perform?
- Does an excessive allocation to private assets present an agency issue?
- Risk: how should risk be integrated into the investment decision process
- What risk awareness should you expect from your investment managers – internal and external?
- What risk metrics should you demand from your managers?
- What risk management process does your manager follow?
As part of this service SSC offers the following:
- Identification of investment issues.
- Assessment and analysis of the investment issues facing you .
- Integrating issues awareness and implications into your investment management process.
- Identifying governance challenges for your investment committee and what skills and experience are necessary to understand what risk is being taken and how to oversee it.
SSC will
- Create content for your board presentation including presentations and dedicated reports.
- Present the analysis and its recommendations to your board.
- Work with your board as advisor on how to execute and monitor the investment process.
We also deliver bespoke solutions to unique problems and all of our services embrace the following:
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