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— Aymeric Poizot, Fitch Ratings’ EMEA Fund and Asset Management Group

Increasing risk aversion as a result of the liquidity crisis has hit small and mid-cap stocks hard, writes Aymeric Poizot.

The liquidity crisis that started in July 2007 in the US real estate market has triggered a “flight to quality” phenomenon, which has led investors to move their capital to “safer” assets.

— Dawid Konotey-Ahulu, Redington Partners LLP

Dawid Konotey-Ahulu explains three complementary approaches to measuring risk within pension funds.

— Aoifinn Devitt, Clontarf Capital

Clontarf Capital’s Aoifinn Devitt explains why, when it comes to commodities, investors should opt for a staggered market entry.

— Aoifinn Devitt, Clontarf Capital

Further to the explosion of interest in commodities, Clontarf Capital’s Aoifinn Devittlooks at enhanced index products.

— Roger Urwin, Watson Wyatt

Sovereign pension funds can be the investment industry’s dream product, with the power to influence, writes Roger Urwin.

Performance measurement teams are compelled to buy in the latest IT systems as they come under pressure from their clients to provide more and more accurate data, writes Henry Smith.

— Scott Donaldson, Hymans Robertson

A variety of dishes can be found on today’s alternative investment menu, but as Scott Donaldson explains, the tastiest investments are often unavailable à la carte.

Allocating to private equity is heavy a commitment of both time and resources and there is no way around this. Jane Welsh outlines how to ensure private equity works for you.

The desire of institutions to invest in alternatives has resulted in a greater demand for consultants’ external expertise, but the bar is being raised, writes Paula Garrido.

Separating alpha and beta shows pension funds’ desire to focus on risk management. But combining them in a return-seeking portfolio is becoming more attractive, says Paul Trickett.

Henk Radder outlines how the traditional definition of a fiduciary manager may not entirely represent the complicated nature of the relationship and the need for teamwork.

The development of sustainable investing as a growing niche market is a good thing for long-term investors, but funds must consider four issues before embarking, says Tim Currell.

As transition management grows in popularity, Jennyfer Stanley analyses best practice in the area and offers five guiding principles for those wishing to enter the industry.

Fund managers looking at algorithmic trading need not only to look at a daunting set of choices, but also to consider how much time and energy is involved, says Jonathan Cohn.

A pension scheme’s asset allocation is dependent on the level of underfunding in the scheme and the path back to parity will alter course as the gap narrows, says Ronnie Bowie.

Pension funds are looking to alternative asset classes in order to diversify their portfolios. The resulting lower returns are offset by the reduced exposure to equity risk, writes Robert Brown.

Criticism of the Dutch FTK framework is unjust and there are several ways for pension funds to implement an alternative investment policy, write Frits Bosch and Bart-Jan Wittenberg.

Client demand for the integration of environmental, social and corporate governance considerations into investment decisions is being met to varying degrees, says Emma Hunt.

Investors need to consider the possibility of market setbacks and the best protection is holding a diversified mix of investments, including hedge funds, says John Hastings.

It’s time for pension funds to utilise their managers’ skills and change from the traditional approach to portfolio construction. Instead they should embrace an alternative route that uses both alpha and beta, says Kevin Carter.

WH Smith’s cash-flow matching strategy to meet benefit and administration costs and minimise unrewarded interest rate and inflation risks, has wide-ranging ramifications, says Tony Osborn-Barker.

The ‘smoothing mechanisms’ of current accounting standards have come under fire following a failure to match lower liabilities despite a significant improvement in investment performance, says Henry Smith.

The traditional cap-weighted approach to investment could be complemented by new diversity and non-price concepts.

Market capitalisation-weighted benchmarks have achieved a position in the investment world that is almost unchallenged. Watson Wyatt’s thinking and beliefs start with these indices and there is no reason why this will change. But some critics say that these weighting structures are not the most efficient way to invest.

International equity mandates were the most targeted in manager search activity last year, data from Mercer shows. Henry Smith reports.

Investment managers are bidding to run pension funds’ entire assets. Andrew Barber explains.

Over the last couple of years the term liability-led investing has received much publicity within the pension fund industry. Much of the debate surrounding it has wrongly presumed that the concept is new. What is new, however, is that several managers have developed liability-led products and are offering them to pension funds.

 Consultant Graziano Lusenti tells Yuri Bender that Swiss pension funds must break free of tradition if they want to have a truly active management approach.
 Graziano Lusenti, one of Switzerland’s best known pension fund consultants, may have been working in the investment market place for 20 years but things are not getting any easier for him and his ilk.

Adroit trustees should look beyond the tool kit provided by fund managers to financial instruments such as swaps that may better manage their risks. Bill Sharpe explains.

Pension fund investment has become increasingly sophisticated, from balanced to specialist, constrained to unconstrained, investment grade to speculative, publicly quoted to private equity. The investor’s tool kit provided by fund managers is certainly colourful.

A growing number of investment managers are well-placed to assist trustees make ‘bonds plus’investing accessible to pension schemes of all sizes, explains Steven White.

UK pension schemes need investment returns. Many are facing deficits on any reasonable basis of calculation and ever generous contributions are unlikely to plug the gap in many cases. Yet there is strong evidence to suggest that trustees are becoming more risk-averse.

An increasingly recommended method for lengthening the bond portfolio is the use of swaps. But, as John Finch explains, many trustees lack the education to understand them.

Australian superannuation funds have a long, and often prosperous, history of investing in infrastructure projects, says Garrie Lette.

Investing in a hedge fund for absolute returns may present extra risks, but most of these can be managed, says Matt Gibson.