Source: XPS Investment. *LGIM did not participate in XPS’ survey in 2018 and 2017. LGIM data is sourced from the KPMG LDI Survey 2017 and assumed to remain constant in 2017 and 2018. The consultancy estimated that over half (54%) of UK pension schemes’ liabilities were now hedged with LDI. This was based on estimating that the UK private sector had a total DB pension scheme liability of around £1.9trn and discount rates of gilts plus 0.5% per annum.However, it also said the actual level of hedging was probably higher as the 54% excluded hedging achieved through holding bond assets outside a specific LDI hedging programme.BlackRock, Insight Investment, and Legal & General Investment Management (LGIM) continued to dominate the LDI market, with XPS’ survey estimating they managed 87% of LDI assets.BMO Global Asset Management added 93 new mandates in 2018 and now had the largest number of mandates, although the manager was still fourth largest by the notional value of liabilities hedged, according to XPS.The consultancy noted that Insight Investment had “also made some significant additions over the year”. It had taken on 30 new mandates to hedge an additional £67bn of notional liabilities. The vast majority of new mandates came from smaller defined benefit (DB) pension schemes, according to XPS. It attributed this in part to the growth of investment platforms and fiduciary management.Directly accessed pooled funds were the single biggest contributor to the growth in mandate numbers, according to the consultancy. It said that 92% of the new mandates in 2018 were from pooled solutions, up from 87% in 2017.Tim Miller, consultant at XPS, said: “73% of all LDI mandates are now in pooled LDI solutions, highlighting the efforts made by managers and advisers to bring accessible LDI solutions to all schemes.”Total hedged liabilities by manager Pension schemes hedged an additional £59bn (€69bn) of liabilities last year, taking the liability-driven investment (LDI) market to over £1trn, according to XPS Pensions Group.Simeon Willis, chief investment officer at XPS Investment, the group’s investment consulting arm, said: “The pensions mass market has overcome its initial reservations and LDI is now a £1trn market.“This is a great achievement for fund managers, advisers and trustees, who are now firmly taking control of their schemes’ futures, not leaving it to chance.”Reporting on its latest annual LDI survey, XPS said broadly all of last year’s growth – up 6% from £965bn in 2017 – could be attributed to new mandates, which increased by 12%, or 265.
View comments MOST READ SEA GAMES 2019: PH’s Nesthy Petecio boxing featherweight final (HIGHLIGHTS) PLAY LIST 02:11SEA GAMES 2019: PH’s Nesthy Petecio boxing featherweight final (HIGHLIGHTS)03:47PH’s Charly Suarez boxing lightweight final (HIGHLIGHTS)00:50Trending Articles02:14Carpio hits red carpet treatment for China Coast Guard02:56NCRPO pledges to donate P3.5 million to victims of Taal eruption00:56Heavy rain brings some relief in Australia02:37Calm moments allow Taal folks some respite03:23Negosyo sa Tagaytay City, bagsak sa pag-aalboroto ng Bulkang Taal01:13Christian Standhardinger wins PBA Best Player award Jiro Manio arrested for stabbing man in Marikina Brian Heruela arrival bolsters Phoenix backcourt, defense OSG plea to revoke ABS-CBN franchise ’a duplicitous move’ – Lacson Scottie Thompson also worthy of Finals MVP, thinks Cone Don’t miss out on the latest news and information. “We lost to a better fighter last night,” said Villamor. “It was a great fight, thank you for all your support.”READ: Melindo falls to Taguchi in unification bout FEATURED STORIESSPORTSTim Cone, Ginebra set their sights on elusive All-Filipino crownSPORTSGinebra beats Meralco again to capture PBA Governors’ Cup titleSPORTSAfter winning title, time for LA Tenorio to give back to Batangas folkTaguchi (27-2-2) also won the vacant Ring Magazine junior flyweight in a fight that he took in the pivotal third and fourth rounds.After Melindo controlled the first two, Taguchi managed to create space as he kept darting in and out of the Filipino’s range. Meralco ‘never the same’ after Almazan injury in PBA Finals Steam emission over Taal’s main crater ‘steady’ for past 24 hours Redemption is sweet for Ginebra, Scottie Thompson LATEST STORIES Lights inside SMX hall flicker as Duterte rants vs Ayala, Pangilinan anew WBA champion Ryoichi Taguchi, right, of Japan gets a punch from IBF champion Milan Melindo of the Philippines in the fourth round of their world light flyweight boxing unification title match in Tokyo, Sunday, Dec. 31, 2017. Taguchi beat Melindo by a unanimous decision to win the both titles. (AP Photo/Toru Takahashi)Milan Melindo’s trainer had nothing but respect for Ryoichi Taguchi after the Japanese slugger unified the WBA and IBF junior flyweight belts at the expense of his fighter on New Year’s Eve in Tokyo, Japan.Edito Villamor took to his Twitter account to show appreciation to Taguchi, who outpointed Melindo 117-111, 117-111, 116-112, Sunday night.ADVERTISEMENT ‘We’re not weak’: Thai trans boxer to blaze trail in France Taguchi then effectively had his best three minutes of the fight in the 10th as he outslugged Melindo heading into the championship rounds.Sports Related Videospowered by AdSparcRead Next OSG plea to revoke ABS-CBN franchise ’a duplicitous move’ – Lacson