The Universities Superannuation Scheme (USS) has teamed up with Ortec Finance to improve the £49.8bn (€57.4bn) pension fund’s asset-liability management process.
USS, a multi-employer scheme for higher-education companies, said it would integrate Ortec’s “unique” system into its investment process to aid its risk management.
Guy Coughlan, chief risk officer at USS, said: “Understanding the risks our scheme faces, as well as the impact of different economic scenarios and investment strategies, is crucial for effective risk management and the delivery of the best possible outcomes for members and sponsors.”
Coughlan added that Ortec’s system combined “sophisticated long-term risk modelling with the flexibility to incorporate dynamic investment and risk-management strategies”.
In a statement, he told IPE “acquiring Ortec’s ALM solution is consistent with our strategy to develop our in-house expertise ensuring long-term risk analysis is industry leading”.
The scheme will combine the Ortec ALM solution with its internal short to medium-term risk model and its internal actuarial liability model, a move that means “we now have sophisticated and comprehensive risk-modelling capabilities for investment risk, liability risk and solvency risk to support decision-making and risk oversight”.
Ortec Finance, headquartered in Rotterdam in the Netherlands, has worked with USS since 2014.
The initial appointment provided performance measurement and analysis tools.
Lucas Vermeulen, the firm’s managing director, said the two services would be combined to help USS incorporate assets, liabilities and contributions into its investment process.