Streamline investment management. Effectively manage multiple funds.
Address outcomes from the Local Government Pension Scheme: Fit for the future consultation
Rapid reforms sweeping through the UK pensions industry are set to bring substantial changes, with several key considerations particularly relevant for Local Government Pension Schemes (LGPS).
From an investment management perspective, an LGPS’s choice of asset liability management will form the foundation of a robust framework for effectively onboarding new partner funds, expanding into diverse asset classes, and implementing investment strategies to deliver outcomes that serve the best interests of members, employers, local communities, and the wider UK economy.
Manage risk, ensure long-term stability and optimize returns
GLASS - Ortec Finance’s integrated and modular asset liability management solution, enables pension funds globally to manage their balance sheets in alignment with long-term objectives. It identifies financial risk factors and provides expert insights to enhance strategic asset allocation, project future pension benefits, and monitor funding levels.Utilize GLASS to:
- Perform stress-testing exercises with economic, narrative, balance sheet-related and climate change scenarios to evaluate the resilience of individual fund strategies
- Decompose surplus and funding risk (CVaR, VaR, Volatility) into underlying balance sheet factors, including the impact of diversification benefits
- Mitigate private asset liquidity risk by monitoring various commitment pacing strategies and assessing their risk in the context of the total balance sheet.
This framework supports partner funds by providing in-depth analysis and effective risk management tailored to their specific investment strategies, while enabling the LGPS pool to optimize resource allocation and deliver added value to each fund, clearly demonstrating its contribution.
Strengthen the strategic asset allocation process
GLASS, powered by Ortec Finance’s proprietary Economic Scenario Generator, consistently integrates short- and long-term investment horizons across more than 700 asset classes and macroeconomic variables, capturing complex real-world behavior.
It can design, adjust and monitor a Strategic Asset Allocation (SAA) by:
- Optimizing in alignment to a fund’s strategic objectives, while accounting for real-world constraints
- Leverage mean, volatility or tail risk optimization techniques on the portfolio, funding level or surplus return to enhance risk-adjusted performance
- Calibrate in-house Capital Market Assumptions (CMAs), whilst maintaining the complex relationships between asset classes and across short- and long-term investment horizons.
Communicate and report effectively to all stakeholders
GLASS is available through different reporting models to help support LGPS pools communicate results and outcomes to a wide range of stakeholders, with the flexibility to switch between models as in-house resources and capabilities evolve.
- Software as a Service (SaaS model): Suitable for LGPS pools with an established in-house team and necessary expertise
- GLASS is used by the pool’s in-house investment team to carry out regular reporting and ad-hoc SAA analysis. Consulting provided by Ortec Finance through technical assistance along with comprehensive training on system use and maintenance.
- Investment consulting: Suitable for LGPS pools in the process of establishing an in-house team and building necessary expertise
- Quarterly investment and funding reports, delivered by the Ortec Finance team, to help measure investment risks and monitor long-term funding objectives.
- Hybrid: A flexible alternative option tailored to the specific needs of an LGPS pool.
- The analysis and reporting are shared between the in-house and Ortec Finance team, allowing the internal team to focus on specific areas based on their preferences and capacity, while simultaneously building internal capabilities.
All options include our user-friendly dashboard tool, GLASS FLEX, designed to facilitate effective communication of complex results from GLASS to a broader set of stakeholders. It allows users to build bespoke dashboards and generate tailored, client-specific reports.
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A history of working within the LGPS and consolidation space
This effective collaboration not only improved the efficiency of regular reporting and analysis across each LGPS partner fund but also equipped the Ortec Finance team with the insights needed to tailor their expertise to the specific context and needs of the LGPS.
As a result, Ortec Finance has delivered ongoing support and advice aligned with the LGPS’s unique liability structures and the requirement for pools to model multiple partner funds within a single, integrated framework.
A range of comprehensive solutions for LGPS’s investment decision-making and reporting needs
Ortec Finance offers several solutions for LGPS pools facing the challenges of reform. By leveraging advanced models and technology, we empower pools to navigate the complexities introduced by the upcoming UK Pension Scheme Bill. While GLASS supports strategic risk management, asset allocation and asset liability management, PEARL helps to measure and understand the added value of investment decisions from multiple perspectives, and ClimateMAPS identifies systemic climate risks and opportunities using top-down climate scenarios.Contact us to learn more
Contact
Oliver Henriquez
Sales Director, EMEA