Custom Fixed Income Solutions for LDI Clients

This document is a guide that outlines the approach to structuring customized fixed income mandates for liability-driven investing (LDI) clients. It begins by defining the client's situation, objectives, and risk tolerances, emphasizing the importance of understanding the fixed income mandate's role within the total portfolio. The guide details the process of modeling various portfolios to analyze risk/reward trade-offs, aiming to mitigate interest rate risk while strategically allocating to credit and liquidity risks. It presents a comprehensive range of LDI implementation strategies, including fixed income pooled funds and the use of derivatives. The document also discusses different liability reporting methodologies, such as accounting liabilities and solvency liabilities, and the challenges associated with replicating solvency-based portfolios. It concludes by emphasizing the importance of tailoring fixed income portfolios to meet specific client needs and objectives, utilizing a blend of government bonds and credit strategies based on individual risk tolerances.