Liability-Driven Investing (LDI) Solutions

Liability-driven investing helps corporate pension plan sponsors ensure the funding of future liabilities while balancing the resulting risk exposures on a total plan basis. We recognize that many aspects of a plan’s investment strategy, such as
return-seeking assets and plan goals, impact results for beneficiaries.

Parametric offers comprehensive, systematic, risk-managed solutions at all stages of the LDI process, customized in partnership with pension plan sponsors of all sizes. We go beyond the traditional fixed-income-only approach to LDI with return-seeking investments and completion overlays.

Our approach

We consider both growth needs and risk constraints while addressing two primary problems:

Adequate funding

Surplus risk management

Adequate funding

Underfunded liability or desire to
maintain adequate funding

Surplus risk management

Mismatch between asset and liability
risk profiles

David Phillips, CFA, ASA, EA

Director, Liability-Driven Investment Strategies

More about this author

Meeting sponsors’ needs

Parametric offers many options that help meet the evolving needs of a sponsor’s LDI strategy.

LDI Journey

Parametric Solutions

All our LDI solutions incorporate our proprietary program of key risk analysis, risk management, and daily asset monitoring.

Monitoring and analysis

Monitoring and Analysis

Why Parametric for LDI?

Flexible, innovative solutions

Customization across physical and overlay programs
Standard and liability-aware benchmarks and dynamic hedge ratio management
Deep experience across derivatives and fixed income

Robust capabilities and resources

Daily monitoring and on-demand reporting of assets and liabilities
Trading and cash-flow management
State-of-the-art technology
Thought leadership

Exceptional client service

Access to our investment professionals, actuarial expertise, and LDI specialists
Tailored transitions and implementations
Consultative approach
Custom client reporting

Latest insights and research

See all insights and research >

Investment advisory services offered through Parametric Portfolio Associates^® LLC ("Parametric"), an investment advisor registered with the US Securities and Exchange Commission (CRD #114310). Parametric is also registered as a portfolio manager with the securities regulatory authorities in certain provinces of Canada (National Registration Database No. 42850) with regard to specific products and strategies. Parametric provides advisory services directly to institutional investors and indirectly to individual investors through financial intermediaries. The information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. Investing entails risks, and there can be no assurance that Parametric (and its affiliates) will achieve profits or avoid incurring losses. All investments are subject to potential loss of principal. Parametric does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the disclosure page for important information about investments and risks.

S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P^® indexes are registered trademarks of S&P DJI; Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones, and their respective affiliates do not sponsor, endorse, sell, or promote Parametric and its strategies, will not have any liability with respect thereto, and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices.

Liability-Driven Investing (LDI) Solutions

Our approach

Adequate funding

Surplus risk management

How Low Interest Rates Are Changing Liability-Driven Investing

Defining Two Varieties of Volatility in Corporate Pension Plans

LDI Is Everything: The Parametric Approach to Building Institutional Assets