Cash flow driven investment (CDI) strategies - A solutions-based approach for investors
Liability Driven Investing (LDI), an investment term widely recognized by Defined Benefit (DB) plan sponsors and investment professionals, broadly represents the investment strategies focused on managing the risks associated with a pension plan’s liability. Pension funds, however, are not exclusive beneficiaries of a liability-centric approach to asset management. Endowments, foundations, corporations, and other institutional investors also have unique liability profiles.
In the following publication, we highlight the benefits of designing a cash flow driven investment strategy for a defined set of payment obligations. This approach can be a compelling alternative to a more widely used total return investment strategy, which can expose investors to both market and operational risks.