Van Lanschot Kempen has appointed State Street Global Advisors (SSGA) to manage its liability-driven investment (LDI) portfolios using a comprehensive investment solution.
Designed for Kempen’s pension fund fiduciary management clients, SSGA will manage a multi-billion pound portfolio reflecting a changing landscape for LDI, the firm stated.
The firm currently holds €94bn in client assets, however the value of SSGA’s new LDI mandate was not disclosed. Clients will not be incurring any extra costs or membership requirements from the transition, and some could even have substantial savings, a spokesman told IPE.
It is not clear how Kempen’s LDI strategies were previously managed as the spokesman declined further comment.
Among other drivers, the Bank of England buying up to £65bn worth of Gilts in September 2022 at the same time as bond issuance increasing has prompted many pension schemes to review their approach to LDI, Kempen stated.
The new investment solution – jointly designed by Kempen and SSGA, and powered by Charles River Investment Management Solution (CRIMS) – will help clients navigate a new economic landscape, manage liquidity, reduce their funding level volatility, and implement their investment strategies in a transparent and cost effective way, Kempen said.
Nikesh Patel, head of client solutions and chief investment officer at Kempen, said: “We have noted a desire for an investment solution which provides greater liquidity control and dynamic management to allow schemes to plan for a range of scenarios in an uncertain macroeconomic environment.”
Kempen launching this segregated solution reflects more general macroeconomic changes to the LDI landscape, the firm stated. The goal of this appointment, according to the firm, is to sustainably create and preserve wealth for clients through SSGA management over such long-term investment policies and eliminate a worsening of the LDI crisis.