Legal warning over too safe LDI
Nov 21st, 2006 | Filed under: Liability Driven InvestingBy: Daniel Brooksbank, IPE.com
Published: November 20, 2006
Clients of Portable Alpha’s cousin Liability-Driven Investing (LDI), take note: According to UK law firm Reynolds Porter Chamberlain, trustees who embrace LDI can leave themselves exposed to negligence claims for being too conservative.
According to IPE.com:
“Reynolds’ partner Simon Goldring said the strategy could be storing up problems for the future: ‘A low yielding gilts strategy could lock in a fund’s deficit, whereas a more balanced gilt/equity investment has a better long term chance of capital growth.’”
