PIA offers a spectrum of LDI strategies that match each unique liability structure, while maximizing the asset yield for fully funded liabilities or maximizing the likelihood of fully funding an underfunded or uncertain liability.
PIA believes that every set of liabilities contains its own constraints and goals and, as a result, unique and customized solutions are needed to achieve optimal liability funding and ensure success. PIA offers customized services to institutions and individuals that help in evaluating the status of investor’s liability funding along with expectations about future liability status under various market environments and volatilities.
We believe that dialogue with the client and consultant is essential in providing a clear understanding of the unique liabilities of the client. Whether developing a solution for an underfunded or fully funded plan, we will develop a customized client benchmark with the goal of optimizing income and meeting liability needs while minimizing volatility.
- PIA strongly believes that probabilistic analysis, superior risk management skills and the employment of sophisticated liability software are all essential components in achieving a successful liability solution.
- At the core of PIA’s investment philosophy is its probabilistic analysis of financial markets with a central emphasis on risk measurement and valuation. We believe that this approach provides an optimal way to structure portfolios that will predictably and repeatedly meet liability objectives
- PIA’s team employs its unique quantitative skills and years of experience to employ higher yielding asset classes to capitalize on opportunities available across the entire market (both equity and fixed income) to meet any given liability structure and enhance portfolio returns.
- In an effort to provide a fully customized solution, PIA will employ low cost index funds or ETFs to access non-fixed income sectors, if those asset classes are essential in achieving a client objective.
- For underfunded plans, PIA has developed unique quantitative tools based on the structure of an investor’s liabilities, including the Hitting Time distribution of the “Present Value of Liabilities” (“PVL”) curve, which is designed to evaluate the likelihood of meeting certain liabilities for these plans while offering valuable insights regarding the management of these liabilities.
- For fully funded plans needing to maximize yield (or returns) with funding constraints, PIA can evaluate probabilistically the optimal portfolio structure that will achieve a given upside goal before a downside event occurs. PIA utilizes quantitative tools to perform constraint optimization evaluation of the return potential of sample portfolios and perform scenario analysis to ensure proper liability matching under various interest rate and economic environments.
For additional information, including presentations and published research on PIA’s LDI solutions, please CONTACT US.