Our approach to Cashflow Driven Investing




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Executive summary
  • Ultimately all schemes need to pay their benefits, however in order to do so they need to make returns on their current assets to ensure they have sufficient assets in the future. Buying targeted assets which provide cashflows to help meet benefit payments can be very useful in achieving the objective of paying all your benefits although you need to ensure it doesn’t create issues with the ability to generate investment return.
  • We believe the key to implementing a strong cashflow generating portfolio is to consider it holistically within the context of your wider portfolio as another (valuable) building block within a pension scheme’s toolkit – in particular by integrating it into the LDI portfolio given its very similar risk management characteristics. This allows schemes to both access the certainty of a cashflow generating portfolio along with the return potential and risk reduction elements of a well-diversified portfolio.
  • By taking a holistic approach this also allows scheme to be far more opportunistic about buying cashflow generating assets when they are at their cheapest – increasing return and reducing risk.

What is cashflow driven investing?

CDI at its simplest is an investment solution which focuses on buying low risk assets which pay out clearly defined or contracted cashflows. For example a government bond can form part of a CDI approach as it pays interest payments (coupons) at known future dates.

CDI has become an increasingly popular concept for pension schemes as it gives you both a set of cashflows that can be used to meet your benefit payments and the certainty that you will not need to be a forced seller in the event of market downturn.

Income versus Capital Growth

There are two ways you can generate return from an asset:

  • Income: Asset pays income, this can either be contractually known in advance such as bonds or variable such as with a diversified property portfolio.
  • Capital Growth: The asset can grow in value with or without paying out any income.

At R&M we believe over the long term you should be relatively agnostic between whether you source return from income or capital growth. It is usually the case that due to income having a higher certainty of being delivered it will generate a lower return than capital growth. However, in practice returns can fluctuate through time giving nimble investors the chance to be opportunistic about when they allocate. For example, coming into the 2008 crash income was more valuable whereas leaving 2008, capital was more valuable as capital values had been very beaten down.

A robustly constructed portfolio does not put too much reliance on only one of these sources of return as this can limit the asset classes available and therefore your diversification.


Common CDI assets

There are a wide range of different assets that can be used as part of a CDI portfolio, we have picked 4 of the most common and easy to access asset classes. Other asset classes we haven’t discussed here but are applicable (but with higher complexity) can include Loan portfolios, infrastructure and equity.

Asset Class What is it?
Government Bonds
  • Bonds issued by governments that pay coupons and return your capital at maturity.
  • Generally considered the lowest risk asset class and therefore offers the lowest return.
Investment Grade Credit
  • Bonds issued by large, strong companies which pay pre-agreed coupons.
  • Usually slightly higher risk than government bonds given companies are more likely to default on their debt.
High Yield Bonds
  • Bonds issued by large companies but not as strong financially as Investment Grade ones.
  • More likely to default on their debt however this also means you get a higher return.
Property
  • Investment in properties let to tenants. Rent received provides cashflows.
  • Cashflows are contractual although there is the possibility for companies to default on contracts – similar in some ways to high yield bonds.

The River and Mercantile Approach to CDI

At R&M we use CDI not as a strategy on its own but rather as a component with in a much broader strategy. When building a strategy we believe it needs to based on a number of key principles:

Invest appropriately for where you want to get to, for example if you want to buy-out in 10 years there is no need to buy cashflow generating assets beyond 10 years. The buy-out insurer may not accept these assets as part of the transaction (i.e. cash only) which would make the scheme a forced seller and likely to incur additional costs.

Ensure your CDI portfolio is integrated with the rest of your portfolio to create a robust, diversified allocation with a range of return sources which is suitable given the scheme covenant and funding.

Build flexibility into your approach such that your portfolio can both adapt to changing liability profiles and also take account of market opportunities as they arise. This includes Trustee and Sponsor preferences such as targeted early buy-ins which will change the profile of cashflow payments.


Building a balanced portfolio

When building a CDI portfolio the payment date of the cashflow should play a big role in deciding how you decide to back it.

The key thing to remember is that longer dated cashflows are considerably more uncertain than shorter dated ones. Any estimate of future cashflows will be based on a host of assumptions (which you agree with your Scheme Actuary). Any experience which differs from the assumptions made will result in needing more or less cashflow than originally expected.

The further away a cashflow is, the lower the likelihood that your assumptions will bear out. However, the upside is that for long term cashflows you have the advantage of time. Over the long term the ability to wait can be really valuable to generate the certainty of return which pension schemes need.

The majority of pension schemes rely on equity markets as the primary driver of return for their growth assets. However, equities are known to be very volatile over the short term, which makes them an unattractive asset class to use for meeting short term cashflows. But over the long term equities have consistently provided high returns. If you have the luxury of time then using stronger returning asset classes such as equity can be beneficial. For example we have shown below that as you extend your holding period in equities you can take the probability of achieving 6% p.a. from just over 60% to just short of 100%.

Therefore, we don’t believe you should give up return if you don’t need to, for example over the long term, equities have tended to return around 4-5% p.a. above government bonds and therefore around 3-4% above Investment Grade credit. This is a fair amount of return to give up on if you don’t need to.

From our perspective this raises the question: why shouldn’t you have the best of both worlds by removing your short term risks with CDI and cover your longer dated flows with higher performing assets such as equities?


How does this look?

Building a portfolio now becomes simpler as we can consider the following approach:

  • Short Term: Use cashflow generating assets with high certainty of paying out their expected income where the cashflows are most certain and underperformance is most dangerous.
  • Long Term: Have less certainty in value of cashflows being matched and use advantage of time to wait to invest in high returning and more volatile short term assets such as equity.

As an example of how this could look we have shown a portfolio built for a scheme with an average maturity which uses cashflow matching to cover the first 15 years of cashflows and a combination of gilts and growth assets for longer maturity benefits.

You will note that we have not fully covered the first few years of cashflows. We are cognisant in today’s world of Pensions Freedom that short term cashflow can be very variable. It’s preferable not to lock up assets to produce cashflows which aren’t needed whilst retaining some liquid assets which can be sold to meet cashflows occurring earlier than expected.


How do I assess the risks?

One of the interesting points about CDI is that it requires a different way to think about risk than for more traditional equity/bond portfolios.

Traditional Equity/Bond Portfolio
  • Most risk analysis is aimed at understanding how much the value of your portfolio moves in any year.
  • This is described as the volatility of the portfolio.
  • The higher the volatility the more uncertain we are of the value of the portfolio at the end of the year and therefore the more risk you are taking.
Cashflow Driven Portfolio
  • For a cashflow based portfolio however the risk is not volatility or price movements but rather not receiving the cashflows you were expecting at the specified dates.
  • This means that price movements for a portfolio are far less of interest and instead you should be concerned about not receiving the cashflows you budgeted for.

As a simple example of how these two methods of risk analysis can diverge, consider a long dated gilt index.

  • This has a volatility of 10%, compared to global equities of around 15%
  • So around two thirds of the “risk” on a traditional measure.
  • On the other hand, it is generally assumed the UK Government will always manage to repay its debt and as such on a cashflow based approach the risk is zero.

Our view is that you need to consider your risk differently when you are looking at a cashflow driven portfolio and instead assess the potential cashflow shortfall as opposed to looking at the volatility of your portfolio.

If we take our previous allocation we created for the cashflow driven portfolio and compare this to a conventional equity/bond portfolio we can show the key metrics that matter. For comparison we have also shown a CDI Portfolio that uses High Yield bonds for the first 5 years of cashflows. Please note these are based on a scheme of £245m.

Metric Description Equity/Bond Portfolio2 CDI Portfolio (IG only)3 CDI Portfolio (inc HY)4
Cashflow Coverage (20 year) What proportion of the first 20 years of cashflows are covered by income paying assets. 53% 82% 85%
Expected Return (absolute) Long term expected return on the portfolio Cash + 2% p.a. Cash + 1.5% p.a. Cash + 1.5% p.a.
Value at Risk (1 year) Long term expected return on the portfolioIn 95% of cases your deficit will not fall by more than this amount. £35.7m £19.6m £18.1m
Cashflows at risk (20 year)1 At the 95th percentile what proportion of the cashflows could you lose in the first 20 years. 9% 9% 16%

Notes:

Figures are calculated by River and Mercantile Solutions based on a £245m scheme with a duration of 15 years and are intended to be high level estimates.

1 Calculated as an instantaneous shock with income falling by an amount equivalent to the 95th percentile of historic loss rates.

2 60% equity, 40% government bonds

3 40% Investment grade bonds, 20% equity, 40% government bonds

4 15% High yield bonds, 35% investment grade bond, 10% equity, 40% government bonds

  • We believe this type of analysis is very beneficial as under the traditional Value at Risk metric it shows a CDI portfolio which uses High Yield, would have lower risk due to the additional diversification of the high yield.
  • On the other hand when you consider through the lens of Cashflows at Risk, the default risk in High Yield is more than 50% higher when we look at the higher risk scenarios.
  • We would also note this only assumes the first 5 years of cashflows are covered by high yield, if we wanted to assume additional use in the future then the size of this risk could increase.
  • This may be absolutely fine provided the Trustees understand the risks. However we think too often these risks are not properly identified due to looking at risk from the wrong angle. The key is to make sure the analysis is suitable for both the portfolio, scheme circumstances and Trustees’ needs.
What are the benefits of this approach?

We believe employing a fully integrated risk managed strategy using CDI alongside Growth assets has the following key benefits:

  • Target Return: Allows a scheme to still target significant levels of return whilst materially lowering short term cashflow negativity risk.
  • Diverse return sources: Can invest across the full range of different asset classes which opens up the opportunity to access wider sources of return and lower risk.
  • Lowers reinvestment risk: Some CDI solutions assume CDI assets are topped up over time. There is a risk that CDI assets become more expensive which means topping up would reduce your future expectations of return – by not assuming any reinvestment under our model we significantly reduce this risk.

We have been developing tailored CDI strategies with our clients for a number of years and would be more than happy to work with you to best integrate a CDI solution into your strategy.



Please note that all material within this communication is produced by River and Mercantile Solutions and is directed at, and intended for, the consideration of Professional clients only. This document constitutes a financial promotion within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). Retail clients must not place any reliance upon the contents.

The information expressed has been provided in good faith and has been prepared using sources considered to be reliable and appropriate. While this information from third parties is believed to be reliable, no representations, guarantees or warranties are made as to the accuracy of information presented, and no responsibility or liability can be accepted for any error, omission or inaccuracy in respect of this. This document may also include our views and expectations, which cannot be taken as fact.

The value of investments and any income generated may go down as well as up and is not guaranteed. An investor may not get back the amount originally invested. Past performance is not a guide to future performance. Changes in exchange rates may have an adverse effect on the value, price or income of investments.

A Spectrum of Delegation

Note 1: “River and Mercantile Solutions returns” represents the aggregated returns of the return seeking assets, including liability hedging solutions, of the set of our fiduciary management clients that have comparable investment strategies.

Note 2: Some figures are affected by rounding.

Note 3: For the avoidance of doubt, 22% is the amount which annualised River and Mercantile Solutions returns have outperformed annualised equity returns between January 2004 and March 2009, and 24% is the amount by which annualised River and Mercantile Solutions returns have outperformed annualised equity returns between October 2007 and November 2016.

Source: River and Mercantile Solutions, Bloomberg

Best DB Consultancy 2016

20 May 2015

P-Solve, part of River and Mercantile Group, is pleased to announce that it won two awards at the Pensions Expert Pension and Investment Provider Awards (PIPA) held on 20 May. The PIPAs recognise excellence among providers of products and services to UK workplace pension schemes and the three key criteria used to adjudicate the awards are performance, innovation and service standards.

P-Solve was named Best DC Investment Provider of the year for its innovative use of segregated custody accounts.

The business also won an award for Best Fiduciary Manager of the year for its expansion into DC and success widening the DC investment opportunity set through ETFs and the ability to use less liquid investments.

Commenting on the awards Britt Hoffmann-Jones, Managing Director, DC Solutions at P-Solve said: “We are very proud to receive recognition for our hard work on the DC side. These awards are a result of listening and responding to our clients’ changing needs. We first developed our fiduciary management service for DB schemes in 2003, to help clients manage our clients growing governance burden. Following a wave of new regulation and best practice, clients identified similar governance constraints for DC. So, we extended fiduciary management to DC schemes in 2011. Delegating dayto- day investment can help our trustee clients manage their time better – for example, by freeing them up to spend more time on governance and member communication. It is worth remembering that the suitability of a fiduciary approach depends on the trustee board.”

How the EDOS looked on 6 February 2013

Strategy

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Risk management is key

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While this is important, it means more to us. It is critical that, in our day-to-day dealings, both we and our clients benefit. To this end, we should not take risks in relationships where only one side is rewarded and we will be forthright in guarding against this eventuality. In day-to-day terms, it’s also how we organise our time, prioritise our work and assess new projects and development. The value of being commercial equates to creating value for all. It’s about balancing risk and cost against the potential of reward.
Ajeet Manjrekar

Co-Head of River and Mercantile Solutions

Ajeet focusses on working with trustees to understand their specific investment and governance needs in order to design innovative solutions to achieve their funding objectives.

As a qualified actuary with extensive experience in both investment consulting and asset management, Ajeet is part of the senior management team with responsibility for the quality and evolution of our client-driven services.

He has extensive experience bringing together teams from different backgrounds to address unanticipated but emerging client needs. Examples have ranged from designing capital protection solutions for Defined Contribution schemes, to helping foster US pension schemes’ usage of liability-driven investment. Recognising that ideas can travel – that solutions arising in one region or part of the market can frequently be applicable elsewhere – he harnesses the expertise and insights of team members from across our business to solve the client problem, whatever it might be.

He re-joined us in 2016 having spent the last few years in Deutsche Bank’s asset management businesses. Prior to that he was a lead investment consultant advising several of our defined benefit and defined contribution clients.

Ajeet has a degree in Mathematics from Warwick University.

Barbara Saunders

Head of Client Engagement

Barbara has overall responsibility for client engagement with River and Mercantile Solutions, focusing on maintaining and improving our clients’ experience of the business. In this capacity she is involved with all our clients, but in addition she leads the teams advising eight defined benefit pension schemes, ranging in size from £70m to £2bn.

These include clients for which we act as an investment consultant, and clients that have appointed us as fiduciary manager. Over her career to date she has in-depth experience of working with many more clients, including larger DB schemes, DC schemes, sovereign wealth funds and charities.

Barbara has significant experience of providing advice across the full range of investment considerations. This demands a grasp of detail, and the ability to understand that detail in its proper context, and the decisiveness to make definite recommendations on the basis of that understanding . But it also requires an aptitude for conveying that understanding to others, and for persuasion. This can prove crucial when significant investment decisions are required within a fairly short timeframe, but it relies on her ability to develop trust with her clients over the long-term.

Barbara’s investment expertise is reflected also in her role as a leading member of the Investment Strategy Committee, which sets the house view on investment and strategic considerations for our DB clients. She has a particular depth of understanding of liability hedging, having spent the early part of her career modelling and trading LDI strategies for DB pension schemes.

Barbara is a qualified actuary.

She graduated in 2004 with first class degree in Mathematics from Royal Holloway, University of London, and obtained a Post Graduate Diploma in Actuarial Science from Cass Business School.

Barbara joined River and Mercantile Solutions in 2007.

Jack Berry

Global Head of Solutions

Jack is responsible for providing River and Mercantile Solutions with strategic direction across all of its advisory businesses, ranging from defined benefit (DB) and defined contribution (DC) pension schemes to insurance companies , in the UK and US.

He is also the lead adviser on several DB scheme clients. These include clients that retain River and Mercantile Solutions as an investment consultant, and those that employ it as a fiduciary manager. He has experience as adviser to numerous DB schemes with assets of between £25m and more than £5bn.

His clients appreciate his strong understanding of the interplay between, on the one hand, a sponsor’s need to contain its pension-related risk and, on the other, a trustee board’s need to develop an investment strategy. Likewise, they value his ability to communicate to trustee boards and other advisors on the design and implementation of complex solutions, including equity derivative strategies and liability-driven investment (LDI). He is also able to draw on his international experience in prior roles and with River and Mercantile Solutions’s advisory business in the US, when advising his clients.

Within River and Mercantile Solutions, he has led work on the use of derivatives in LDI and structured equity, playing a leading role establishing River and Mercantile Solutions’s bespoke solutions business. He has also been actively involved in the development of River and Mercantile Solutions’s US advisory business since 2007. He joined River and Mercantile Solutions in 2004.

Jack is a chartered accountant. After working as an audit manager at Ernst & Young Zimbabwe and then in the corporate finance team at Standard Chartered Merchant Bank, in 1995 Jack co-founded a corporate finance and structured finance advisory business, Real Africa Durolink Zimbabwe, as a subsidiary of Real Africa Durolink, a listed South African Bank. Jack was one of the founding executive directors of Real Africa Durolink London when this subsidiary was started in 1999.

Jack graduated as a Bachelor of Accounting Sciences from the University of South Africa and holds a Masters in Finance from London Business School. He is a member of the Zimbabwe Institute of Chartered Accountants.

Matt Way

Chief Operating Officer

Matt is a chartered accountant who began his career at Ernst & Young in 1989 before moving to Lehman Brothers, where he worked for nine years, until 2007. From there he moved to Bear Stearns and then to Man Group, where he worked for five years with Kevin Hayes, who is now River and Mercantile Group's chief financial officer. Matt joined River and Mercantile Solutions in 2015 following roles at RBS and London Clearing House.

Matt has gathered substantial experience in business partnering, applying financial, commercial and practical judgement to all operational issues including product viability, forecasting, operational infrastructure, risk controls and compliance. At River and Mercantile Solutions he takes lead responsibility for efficient operation and effective risk management of the advisory and fiduciary management divisions.

He has senior management experience managing large teams and engagements across multiple businesses and support functions. He has a focus on change management and project management, which he has used to deliver simple, practical and innovative solutions and to enhance efficiency. He coordinates diverse teams and functions to solve problems as they arise.

Patrick O’Brien

Investment Director

Patrick leads the investment team, which is responsible for delivering River and Mercantile Solutions’s fiduciary management services to clients. His team conducts on-going investment research, performance monitoring and risk tolerance management, implements asset allocation decisions, and conducts execution trading and transition management.

Patrick is responsible for supervising all of this. Above this, he is a member of the Investment Committee and he chairs the Multi-Asset Committee, which between them determine River and Mercantile Solutions’s views on which asset classes to under/overweight and which investment managers to invest with. He therefore plays an important role in the formation of investment decisions, both from month-to-month and, when financial market conditions dictate, intra-month.

Patrick also has lead responsibility on two defined benefit pension scheme clients, both with assets in the range £100m to £250m. One of these retains River and Mercantile Solutions as its investment consultant while the other is a fiduciary management client. In this capacity, Patrick plays a pivotal role advising trustees on investment strategy, introducing investment ideas and risk management ameliorations to the trustees, and giving them appropriate training to enhance their governance capabilities.

Patrick began his financial services career as an operations associate at Legal & General, following two years in manufacturing industry. He graduated from University College Cork with a BSc in Finance.

Patrick joined River and Mercantile Solutions in 2008.

Ross Leach

Co-Head of River and Mercantile Solutions

Ross is Co-Head of River and Mercantile Solutions, where since 2004 he has acted as a lead investment consultant to the trustees of defined benefit pension schemes and to corporate sponsors.

He has experience of clients with assets ranging from £50m to more than £5bn, and across River and Mercantile Solutions and his former employer he has client relationships that have lasted more than 15 years. This calls on his skills to understand the needs of clients, to understand investment strategies and products, and to match the latter to the former in the simplest but most effective way possible.

Some of his clients retain River and Mercantile Solutions as their investment consultant while others have adopted a fiduciary management approach. He has supplied advice that has taken schemes to buy-out, and is currently working with a number of schemes that are focused on reaching a self-sufficiency target over the next 10 to 15 years.

Ross is a member of River and Mercantile Solutions’s Investment Strategy Committee. This committee is instrumental in developing client advice, and has the final word on whether a particular investment product is fit for recommendation to clients.

Ross, who joined River and Mercantile Solutions after four years at Punter Southall, the company’s former parent, has a degree in Mathematics and is a Fellow of the Institute of Actuaries. He has worked on a number of actuarial working groups.

Pensions Insight DC Awards 2016 – Best Default Fund Strategy

26 October 2016

P-Solve, part of River and Mercantile Group, is pleased to announce that it won an award at the Pensions Insight DC Awards 2016 held on 26 October. The Pensions Insight DC Awards 2016 and are designed to celebrate the excellent work done by defined contribution providers and schemes up and down the country.

P-Solve was named Best Default Fund Strategy as the judges stated they were impressed with how P-Solve adapts the strategy at retirement to allow for Pension Freedoms in a flexible way to meet the needs of different schemes’ members, and also the intelligent life-styling approach using blended funds.

Commenting on the award Niall Alexander, Director, P-Solve, said: “This month P-Solve celebrates its five year anniversary in DC fiduciary management. The award win reflects the hard work and results we have achieved on behalf of our DC clients (and specifically their scheme members) in that time, as we have sought to offer flexible solutions to the challenges facing trustees. Wanting to improve financial security for as many people as possible by thinking more deeply about investment than anyone else is central to our business.”

Engaged Investor Trustee Awards – Best DB Consultancy 2016

7 July 2016

P-Solve, part of River and Mercantile Group, is pleased to announce that it won an award at the Engaged Investor Trustee Awards held on 7 July, celebrating excellence among pension scheme trustees and their providers and advisers.

P-Solve was named Best DB Consultancy 2016 as the judges said they were impressed by P-Solve’s innovation and service. The firm’s submission emphasised the work P-Solve has done developing tailored investment solutions for small and medium-sized pension schemes, as well as large ones.

Commenting on this year’s award Ross Leach, Managing Director, P-Solve, said: “We are very proud to receive this award and the recognition of the hard work on behalf of our DB clients it represents. We strive to understand the challenges facing trustees and offer a range of services to provide real insight and support for our clients.

Pensions Age Awards – Multi-Asset Manager of the Year 2016

25 February 2016

P-Solve, part of River and Mercantile Group, is pleased to announce that it won the award of Multi-Asset Manager of the Year at the Pension Age Awards held on 25 February. The Pensions Age Awards were launched to reward both the pension schemes and the pension providers across the UK that have proved themselves by demonstrating excellence, sophistication and innovation in all aspects of what they do.

According to the judges, this firm has demonstrated its understanding of the multi-asset space by combining experience with skill in order to produce an investment offering well suited to the needs of today’s DB and DC markets – plus it has the performance to show its approach works.

Engaged Investor Trustee Awards 2015 – Best DB Consultancy 2015

2 July 2015

P-Solve, part of River and Mercantile Group, has been named Best DB Consultancy at the 2015 Engaged Investor Trustee Awards. The judges said they had been impressed by P-Solve's involvement in dynamic investment opportunities.

In addition to firm’s success, P-Solve client The Cheviot Trust won the Best scheme report and accounts category at the ceremony held on 2 July 2015, impressing the judges with its excellent design and well-executed graphics.

The award win is the latest in a number of recent successes for P-Solve having been named Best fiduciary manager and Best DC investment provider at the Pensions and Investment Provider Awards.

Commenting on the award, Jack Berry, global head of solutions at P-Solve, said: “We are very proud to receive this award and the recognition of the hard work on behalf of our DB clients it represents. We strive to understand the challenges facing trustees and offer a range of services to provide real insight and support for our clients.

"Wanting to improve financial security for as many people as possible, by thinking more deeply about investment than anyone else, is central to our business. We are proud that our work with pension schemes gives us us the opportunity to help more than 400,000 individuals.”

Pension Investment Provider Awards (PIPA) – DC Investment Provider 2015

20 May 2015

P-Solve, part of River and Mercantile Group, is pleased to announce that it won two awards, DC Investment provider and Best Fiduciary Manager 2015 at the Pensions Expert, Pension and Investment Provider Awards (PIPA) held on 20 May. The PIPAs recognise excellence among providers of products and services to UK workplace pension schemes and the three key criteria used to adjudicate the awards are performance, innovation and service standards.

P-Solve was named Best DC Investment Provider of the year for its innovative use of segregated custody accounts.

Commenting on the awards Britt Hoffmann-Jones, Managing Director, DC Solutions at P-Solve said: “We are very proud to receive recognition for our hard work on the DC side. These awards are a result of listening and responding to our clients’ changing needs. We first developed our fiduciary management service for DB schemes in 2003, to help clients manage our clients growing governance burden. Following a wave of new regulation and best practice, clients identified similar governance constraints for DC. So, we extended fiduciary management to DC schemes in 2011. Delegating day-to-day investment can help our trustee clients manage their time better – for example, by freeing them up to spend more time on governance and member communication. It is worth remembering that the suitability of a fiduciary approach depends on the trustee board.”

Pension Investment Provider Awards (PIPA) – Best Fiduciary Manager 2015

20 May 2015

P-Solve, part of River and Mercantile Group, is pleased to announce that it won two awards, DC Investment provider and Best Fiduciary Manager 2015 at the Pensions Expert, Pension and Investment Provider Awards (PIPA) held on 20 May. The PIPAs recognise excellence among providers of products and services to UK workplace pension schemes and the three key criteria used to adjudicate the awards are performance, innovation and service standards.

P-Solve was named Best Fiduciary Manager of the year for its expansion into DC and success widening the DC investment opportunity set through ETFs and the ability to use less liquid investments.

Commenting on the awards Britt Hoffmann-Jones, Managing Director, DC Solutions at P-Solve said: “We are very proud to receive recognition for our hard work on the DC side. These awards are a result of listening and responding to our clients’ changing needs. We first developed our fiduciary management service for DB schemes in 2003, to help clients manage our clients growing governance burden. Following a wave of new regulation and best practice, clients identified similar governance constraints for DC. So, we extended fiduciary management to DC schemes in 2011. Delegating day-to-day investment can help our trustee clients manage their time better – for example, by freeing them up to spend more time on governance and member communication. It is worth remembering that the suitability of a fiduciary approach depends on the trustee board.”

Pensions Consultancy of the Year 2017

24 February 2017

P-Solve is pleased to announce that it was awarded Pensions Consultancy of the Year at the Pension Age Awards 2017. The awards, now in their fourth year, aims to reward both the pension schemes and providers across the UK that have proved themselves worthy of recognition during increasingly challenging times.

The award recognises P-Solve’s bold approach to investment consulting since the business’s launch in 2001. This included, last year, the introduction of swaptions strategies for clients, allowing them to “get paid” for making strategic risk management decisions.

The panel of judges stated: “This firm stood out for its proactive approach and its use of innovation in a challenging marketplace. Its clear understanding of the investment hurdles facing its clients and its ability to help these clients, whatever their size, through the investment maze set it apart from the rest.”

Commenting on the award Barbara Saunders, Head of Client Engagement at P-Solve, said: “We are very pleased to have received recognition for the innovative investment solutions we can deliver. We are perhaps better known for being one of the pioneers of fiduciary management, but the investment intel that this gives us is applied equally to clients we advise. Ultimately, we look for the best solutions to our clients’ needs, and with clear explanations, our clients are able to act quickly when required. In turbulent times, opportunities arise, and you need to be fleet of foot to take them. We all know pension schemes need return, and we constantly search for ways to help them earn it.”

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Kevin Hayes

Global Head of Solutions

Kevin is Global Head of Solutions and Group CFO at River and Mercantile. He is an international CFO with 25 years' experience in financial services. Kevin began his career at Ernst & Young and was a Partner in the New York office covering financial services audit and consulting clients.

He moved to Lehman Brothers where he held various roles including: Global Capital Markets Controller, International CFO for Europe and Asia, and Head of Productivity and Process Improvement.

In 2007 Kevin joined Man Group PLC in London as Group CFO and Executive Director on the Group Board. He was also a trustee of the Man Group PLC Pension Plan.

Kevin has degrees in accountancy and law from Victoria University in New Zealand and is a Certified Public Accountant in the US.