How we helped our client increase the expected return from an equity allocation

Our client wanted their equity assets to work a bit harder so we introduced a multi-factor approach.

The background

Our pension scheme client was holding a large proportion of its growth assets in index-tracking equities. While the trustees didn’t believe that fully active discretionary management could consistently add value, they did want their equity assets to work a bit harder and provide them with higher returns.

Our solution

We proposed an approach to equity investing that is part-way between index-tracking and an active approach – a multi-factor approach.  This provided a good chance of doing better than an index-tracking, but with lower fees than active.

What did we do?

• helped the trustees to understand a multi-factor approach to equity investing; its potential and its risks
• identified the leading managers offering this type of product
• gave clear advice on a preferred manager and justified why
• worked with the manager to deliver the product so that it met the unique requirements of the trustees
• negotiated on fees
• delivered pragmatic advice on the process for transferring assets to the new manager
• monitored the new manager on LCP Spotlight to verify it was meeting the return expectations

The results

The enhanced investment return from the multi-factor equity allocation has boosted our client’s assets, making a real difference to the overall funding position. With their equity assets now working a harder for them, the trustees objectives were met.

Our client promise

In this video, Peter Thompson shares his personal experiences of working with us throughout his years as a professional trustee.