mallowstreet February Round-up

All eyes will be on Westminster today, as the Chancellor moves from ‘spreadsheets’ to ‘centre stage’. UK growth forecasts have been upgraded this week, but it is clear the Government is a long way from balancing the books.

As we approach Theresa May’s self-imposed deadline for firing the starting gun on Brexit negotiations, it is interesting to see some of the terms that appear in the top 10 searches on mallowstreet, particularly LISA, Regulation / MIFID and Brexit.

Top mallowstreet Search Terms: February 2017

  1. Scheme Governance
  2. LISA
  3. Regulation / MIFID
  4. European Equities
  5. Inflation
  6. Brexit
  7. Defined Contribution
  8. De-Risking
  9. Infrastructure
  10. Credit

There have been a few noteworthy conversations on mallowstreet focused on liability valuation, including this one: Is Gilt based funding still suitable for pension funds and how do you navigate the road to buyout? The conversation is focusing on two key questions:

  1. Is the continued use of Gilt based funding still suitable for pension funds, or what are the possible alternatives?
  2. How should a pension fund approach a buyout / buy-in, what does current pricing look like and what is the capacity in the market in the current environment?

A key tension is emerging, now as defined benefit pension funds prepare for the end game, namely: how do you structure an asset portfolio so that it generates enough cash to pay member benefits without having to immediately, and regularly, sell assets today? It is clear, there are some difficult trustee meetings ahead for some pension funds this year.

We are now weeks away from the start of formal negotiations with Brussels. I wonder, have the past nine months just been the calm before the storm? Personally, I think it is time to hold onto your hat as we leave the calm seas. If anything, the battle between the houses seems to be signaling all is not calm.