LDI and Derivatives

Innovative solutions built around your needs

We help UK pension schemes manage their long-term risks to help meet their investment objectives.

LDI and Derivatives strategies can help to flexibly manage the most prominent risks that pension schemes have to contend with, whilst maintaining a focus on maximising long-term returns. Our approach is built around your specific needs, to ensure creative solutions tailored to your objectives.

Liability-driven investments

The ultimate objective of pension scheme investing is to ensure that there are sufficient funds to pay the liabilities. Liability Driven Investment (LDI) puts this objective at the heart of a scheme's investment strategy. A key aim of LDI is to manage funding level risk (i.e. the variability of the scheme's assets compared to its liabilities). In practice, this usually means using a range of assets, such as swaps and bonds, to construct an investment strategy that closely matches the behaviour of the pension liabilities. These assets are often referred to as "LDI assets".

We work in partnership with you to deliver a capital efficient and flexible LDI solution for the management of your scheme’s liability risks.  Our LDI solutions are cost effective, customised to your specific circumstances and objectives, and focused on providing the risk management strategy which is integrated with your overall investment strategy.  Depending upon your requirements and governance arrangements, we can manage LDI portfolios on a segregated basis as well as through a range of pooled fund offerings.

Structured equity

This allows pension schemes to shape their exposure to equity markets, by targeting the return they need, while offering protection from markets falling. Our experienced team will help you create a tailored exposure to equity markets, through the use of equity options, as well as bonds and gilts.

Generally, this helps to reduce downside risk exposure by forfeiting a portion of returns for protection when markets fall.

Contact Schroders

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.

Worldwide locations

For any further questions, please use our online contact form.

Contact form

For specific queries, please visit our contacts page to find your Schroders representative.