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Mature UK DB schemes use transition managers to de-risk
05 September 2011
Schemes in the UK with a mature profile have lost their tolerance for risk. Transition managers have a key role in helping them establish stability, finds Bob Campion
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Transition management
de-risking
LDI
Transition management until recently was a sober and functional business that rarely raised an eyebrow among the trustees of UK pension funds who made use of its services.
Concerned largely with weightier matters, trustees were content to call in transition teams to support the portfolio changes that came
when equity managers were fired and hired, and leave it at that.
But a gradual evolution of pension fund management in the last decade has triggered a major shift in focus for transition managers, one that has opened unexpected lines of business and breathed new life into what used to be a sedate corner of financial services.
De-risking has taken UK defined benefit occupational pension schemes by storm, a trend that has accelerated in the last few years. Although not clearly defined, the term refers to the widespread desire of trustees and plan sponsors to take a more sophisticated approach to risk...
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