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Tenth birthday balloon

P-Solve’s fiduciary management service makes almost 10 per cent a year for 10 years


Investment consultant and fiduciary manager P-Solve has now completed 10 years of investment returns with its fiduciary management service, achieving an average annual gain of 9.9 per cent a year.

Its performance has also beaten its clients’ liability-related benchmarks by 2.5 percentage points a year, broadly in line with its long-term performance aim.
The returns are stated net of all fees incurred, including those of P-Solve, external underlying fund managers, trading costs, custodian fees and so on.
P-Solve commenced the management of assets and liabilities for its first pair of fiduciary management clients at the start of November 2003.
Glyn Jones, P-Solve’s chief investment officer, said: “From the start in 2003, performance has been critical for our clients and for us. These results show that our approach delivers for the trustees and members of pension schemes. The second half of this last decade included the financial crisis and a global recession, but our fiduciary management clients came through it in good enough shape to face the considerable challenges still existing and yet to come.
“For the first five years of our fiduciary service, we were on our own, and there were many who spoke disapprovingly, fearing a conflict of interest and characterising a consultant that would take asset-based fees as a ‘hired hand, as dispensable as the next fund manager’. I think our 10-year performance record shows that fiduciary management has real benefits for pension schemes.”
P-Solve’s fiduciary management service has made extensive use of liability hedging, diversification and active asset allocation.
It was in at the start of liability hedging, implementing its first liability-driven investment solution for its consulting clients in 2003. It runs an integrated LDI team comprising actuaries, derivatives traders, investment consultants and back-office operators; and, as well as providing liability hedging for fiduciary management clients, it acts as a standalone LDI manager. By number of segregated/bespoke mandates, P-Solve is the third-largest LDI manager in the UK, according to the 2013 KPMG LDI survey.
P-Solve was an early user of less-mainstream assets, including emerging market debt and hedge funds from 2003, and commodities and leveraged loans from 2005. More recent innovations include the seeding of a small-cap UK equity fund designed to take advantage of loosening monetary policy, and the development of an investment opportunity in mortality-linked re-insurance.

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