A sharper focus on the endgame

As DB pension schemes mature and funding levels improve, there is a sharper focus on investing for the endgame, be that an insurance company buyout, self-sufficiency, or transfer to some form of consolidation vehicle.

Meeting the evolving requirements of your investment strategy

As schemes mature and funding levels improve, many trustees are changing the focus of their investment strategy. During the accumulation phase, a typical scheme would focus on growth assets to close funding deficits alongside a liability driven investment (LDI) solution to hedge interest rate and inflation risk. As schemes mature and navigate towards their ultimate endgame, the focus is increasingly shifting to income and cashflow matching.

A different skillset is required for the endgame

A very specific skillset is required to build and implement appropriate investment portfolios to help pension schemes navigate towards their endgame. We offer expertise across fixed income, alternative sources of contractual income and liability driven investment. Our insurance heritage, extensive investment capabilities, and ESG approach makes us uniquely placed to work in partnership with pension schemes to help them achieve their goals.

Initial solution design

We currently offer a free solution design service to help clients and their consultants build robust investment solutions to meet their objectives. This can involve detailed solution design covering growth, income and hedging objectives, and can utilise abrdn pooled funds (including our newly expanded Liability Aware fund range) and / or more bespoke segregated solutions.

Ongoing solution management

The COVID-19 crisis has highlighted to many trustees and sponsors the burden of independently running DB pension schemes, particularly the monitoring and management of the investment strategy during volatile market conditions. In the aftermath of the pandemic we expect many trustee boards to review their governance arrangements. At abrdn, we can provide holistic ongoing management of a pension scheme’s investment solution, utilising the Reference Portfolio approach. We can respond to our clients’ particular circumstances; providing support and advice around the key decisions that will remain with trustees; and also a clear and accountable process for the implementation that we have responsibility for.

abrdn's Fiduciary Management offering formalises our delivery of investment advice to UK DB pensions schemes, building on our long-history of partnering with clients to design bespoke solutions to meet their specific challenges. As an appointed Fiduciary Manager, we can work with clients to develop strategic investment plans specific to their needs and execute using our extensive asset management capabilities.

abrdn has been working with and managing assets for UK DB pension schemes for over 25 years, with over 350 UK DB pension schemes invested today. A dedicated Fiduciary Management team sits within our wider Pension Solutions team. The team has built up a unique skillset with members having experience across both pensions consultancy and asset management including direct portfolio management responsibilities. With this blend of consultancy and asset management experience, abrdn is well placed to understand the client need and build tailored fiduciary solutions.

As a large global asset manager, we have the benefits of scale and deep expertise across key asset classes and strategies. Supported by portfolio management and dedicated risk teams, this allows our Fiduciary Managers to build well-diversified bespoke portfolios to meet schemes' long-term objectives with in-house investment componentry. We have a strong track record of adding value for our clients over many years, including taking a £5bn UK DB scheme from a material deficit into a healthy surplus in a very measured fashion over a 17-year period.

For more information please contact pension.solutions@abrdn.com

Our goal

At abrdn, our vision is to invest for a better future. We want to make a difference for our clients, society and the wider world – while also delivering financial returns. Environmental, social and governance (ESG) considerations have been an integral part of our decision-making process for almost 30 years. By putting ESG factors at the heart of our investment process, we believe we can generate better outcomes for our clients. The impact of Covid-19 makes this goal even more important. Now, more than ever, we need to work together for a more sustainable future.

Our approach

Responsible investing is about delivering value for clients. Our approach falls into two areas. At the investment stage, we use ESG factors to help decide where best to invest. We integrate ESG into our research, analysis and decision-making processes. We also manage specialised funds that incorporate stronger sustainability or ethical principles. Active ownership is how we look after these investments. As shareholders, we vote in a considered manner and work with companies to drive positive change. We also engage with policymakers on ESG and stewardship matters.

Our commitment

It starts with us. As a company, we focus on key societal and environmental issues that matter to our stakeholders, and on which we can have a positive impact. Operationally, that means reducing our emissions and providing fair and inclusive work.