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What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
What will European and UK Pension Funds do next?
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What will European and UK Pension Funds do next?

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  • 1. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012What will European andUK Pension Funds donext?1Robert Gardner4th Annual Inflation Conference
  • 2. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012UK Pensions Today30 Year Nominal Gilt Yield2012345678930-YearNominalGiltYieldin%High17th May 2002=5.12%Low31st Dec 2008=3.70%
  • 3. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Liability Driven InvestmentMaximize your Toolset3
  • 4. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012 4Source: Bloomberg, RedingtonLiability Driven Investment30-Year Gilt Real Yield
  • 5. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Setting Clear Goals & ObjectivesGood Governance=Ability to Act5Attaining AgilityInstituting good governance andstaying on top of market developmentsgives pension funds the Agility to takeadvantage of opportunities and risks.Taking ControlA solid framework for making decisionsthat incorporates long-term goals andrisk constraints puts pension funds inControl.Achieving TransparencyOn-going monitoring of progress andrisks gives pension funds theTransparency to make the rightdecisions.“ACT enables clients tomanage their riskseffectively, exploitattractive opportunitiesand ensure progresstowards full funding.”
  • 6. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Setting Clear Goals & ObjectivesThe Pension Risk Management Framework6
  • 7. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Setting Clear Goals & ObjectivesThe Flight Plan from “set and forget” to “anticipate and react”72012 2013 2014 2015 2016 2017 2018 2019 2020GBPMillionsLiabilities Path Actual Liabilities Assets Path Actual AssetsTime HorizonLiability BasisContributions & Asset Returns
  • 8. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Setting Clear Goals and ObjectivesThe PRMF Dashboard8
  • 9. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Credit Spread and Gilt Yield Evolution9Source: Redington; Bloomberg, Bank of America Merrill Lynch.-1000100200300400500600bpsSterling IG 15+ Corporate Spread 20-Year Gilt Real Yield IG Spread + Real Yield
  • 10. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012The Fixed Income Universe10Numbers refer to the approximate size of each investmentuniverse ($trn).Source: Redington; Barclays (IG, ABS); iBoxx (Subfins); Babson Capital (High Yield, Lev Loans, CLOs); Bluebay Asset Management, Stone Harbor Investment Partners (EM).
  • 11. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012The Case for Unconstrained Fixed Income: 2006-201211
  • 12. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012The Case for Unconstrained Fixed Income: Today12
  • 13. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 2012Flight Plan Consistent Assets13Social HousingTraditional Infrastructure Ground RentsSecured LeasesExamples of FPCAs
  • 14. Private & Confidential BNP Paribas 4th Annual Inflation Conference 20 September 201213-15 Mallow Street London EC1Y 8RD Telephone : +44 (0) 20 7250 3331 www.redington.co.ukContactsRobert GardnerFounder & Co-CEODirect Line: +44 (0) 20 7250 3416Telephone: +44 (0) 20 7250 3331robert.gardner@redington.co.uk14THE DESTINATION FOR ASSET & LIABILITY MANAGEMENTDisclaimer For professional investors only. Notsuitable for private customers.The information herein was obtained from varioussources. We do not guarantee every aspect of itsaccuracy. The information is for your private informationand is for discussion purposes only. A variety of marketfactors and assumptions may affect this analysis, andthis analysis does not reflect all possible loss scenarios.There is no certainty that the parameters andassumptions used in this analysis can be duplicated withactual trades. Any historical exchange rates, interestrates or other reference rates or prices which appearabove are not necessarily indicative of future exchangerates, interest rates, or other reference rates or prices.Neither the information, recommendations or opinionsexpressed herein constitutes an offer to buy or sell anysecurities, futures, options, or investment products onyour behalf. Unless otherwise stated, any pricinginformation in this message is indicative only, is subjectto change and is not an offer to transact. Whererelevant, the price quoted is exclusive of tax anddelivery costs. Any reference to the terms of executedtransactions should be treated as preliminary andsubject to further due diligence .Please note, the accurate calculation of the liabilityprofile used as the basis for implementing any capitalmarkets transactions is the sole responsibility of theTrustees actuarial advisors. Redington Ltd will estimatethe liabilities if required but will not be held responsiblefor any loss or damage howsoever sustained as a resultof inaccuracies in that estimation. Additionally, the clientrecognizes that Redington Ltd does not owe any party aduty of care in this respect.Redington Ltd are investment consultants regulated bythe Financial Services Authority. We do not advise onall implications of the transactions described herein.This information is for discussion purposes and prior toundertaking any trade, you should also discuss withyour professional tax, accounting and / or other relevantadvisers how such particular trade(s) affect you. Allanalysis (whether in respect of tax, accounting, law or ofany other nature), should be treated as illustrative onlyand not relied upon as accurate.©Redington Limited 2012. All rights reserved. Noreproduction, copy, transmission or translation in wholeor in part of this presentation may be made withoutpermission. Application for permission should be madeto Redington Limited at the address below. RedingtonLimited (6660006) is registered in England and Wales.Registered office: 13-15 Mallow Street London EC1Y8RDRisk Management Firm of the Year(2011, 2012)Pension Consultant of theYear 2012http://twitter.com/robertjgardnerhttp://uk.linkedin.com/in/robertjgardner

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