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

Video – Investment Strategy / Asset Liability Management

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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.

Publications

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Transition from LIBOR and Alternative Reference Rates After the End of 2021

Transition from LIBOR and Alternative Reference Rates After the End of 2021

LIBOR will be replaced as the reference interest rate in Switzerland at the end of 2021. We explain the reasons for this, show alternatives and point out possible implications for institutional investors.

Interest Rate and Inflation Risk: How Are Pension Funds Affected?

Interest Rate and Inflation Risk: How Are Pension Funds Affected?

The topic of inflation is currently in the spotlight. Our article looks at the economic context and the historical and current interest rate and inflation risks. It also shows to what extent Swiss pension funds are affected by interest rate and inflation risks and to what extent such risks are acceptable for them.

Tail-risk hedging lessons from the corona crisis

Tail-risk hedging lessons from the corona crisis

The coronavirus crisis illustrates that equity collar strategies may still have a place for pension funds.

Illiquid Investments: Challenges ahead

Illiquid Investments: Challenges ahead

Illiquid investments should appeal to pension funds because of their long-term benefits, but are opportunities equal?

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.

 


Contact Persons

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Dr. Alfred Bühler
Partner
Contact

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Lukas Riesen
Partner
Contact


Factsheets

Asset & Liability Management

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