Legal warning over too safe LDI

By: Daniel Brooksbank,
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

“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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