Legal warning over too safe LDI

By: 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.'”

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