Investment strategy and ALM for institutional and private investors

At a glance

  • Combined expertise in assets & liabilities by financial market and pension fund experts/actuaries
  • Modern, customized and interactive analysis tools for investment strategy definition and asset liability management (ALM) for institutional investors (pension funds, insurance companies, trusts, NPOs, companies, etc.) and private investors (private clients, UHNWI, family offices, etc.)
  • More than 80 projects per year concerning investment strategies
  • Strong client involvement in the formulation of solutions yields comprehensible recommendations (no black boxes)
  • Analysis of various parameters such as risk capacity, willingness to take risks, risk premiums, actuarial, economic or risk-bearing funding ratio, fluctuation reserve, minimum rate of return, investment risks, interest rate risks, performance, etc.
  • As an independent advisor and investment consultant, we strictly avoid conflicts of interests

Investment strategy

Various academic analyses show that performance differences can generally be explained by different investment strategies. Therefore, a specified investment strategy is essential.

Professional risk management requires extensive analysis of assets and liabilities. The success of the investment strategy largely determines the achievement of the investment goals. Asset and liability management is thus one of the core responsibilities of institutional investors (e.g. pension funds). In contrast, private investors strive primarily for value preservation and stability when formulating an investment strategy.

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Setting investment targets

Establishing the minimum rate of return and its determinants, taking different scenarios into consideration, e.g. regarding contributions, benefits and costs as well as the evolution of the pool of insured persons or depending on the target performance.
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Risk profile analysis

The risk profile shows which risks an institutional investor can offset on his own or at best through additional contributions by the risk-bearers. It provides the basis for formulating an appropriate investment strategy. The effects of stabilization measures are analyzed and quantified (see above graphs).

Asset liability management (ALM)

Analyzing the characteristics of assets and liabilities shows the extent to which liability risks can be offset through appropriate investments. These risks are therefore contemplated from the perspective of overall balance (integrated risk management).

Determining asset allocation

The economic characterization of liabilities allows for the formulation of an appropriate investment strategy geared to those liabilities.

 


Contact persons

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Dr. Alfred Bühler
Partner
Contact

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Lukas Riesen
Partner
Contact


Publications

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Is faith in past winners justified?

Is faith in past winners justified?

Rankings of top performers are publicly available for retail funds. However, databases for institutional mandates (segregated accounts and institutional funds) are still incomplete and rare. For our historical simulation of picking past winners we use a set of track records that were submitted by asset managers as part of public and non-public mandate tenders for institutional clients in Europe.

Asset Liability Management Today – Is it Still Fit for Purpose?

Asset Liability Management Today – Is it Still ‘Fit for Purpose’?

The target of asset liability management is to align the assets to the liabilities, i.e. managing risks due to mismatches between the assets and liabilities.

Challenges Pension Funds Face due to Low Interest Rates

Challenges Pension Funds Face due to Low Interest Rates

Risk-averse asset-only investors should go for short duration as risk return is distributed highly asymmetrically.

What can I expect from my pension fund?

What can I expect from my pension fund?

Alfred Bühler and Lukas Riesen explain why the risk-bearing funding ratio could become the yardstick for Swiss pension funds.

Is factor-based allocation new?

Is factor-based allocation new?

Factor-based allocation may be theoretically interesting for Swiss pension funds but it is hard to implement in a practical way.

 


Factsheets

Asset Liability Management

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