Stronghold solutions provide targeted finance benefits beyond their associated investment return, supporting safe investment exposure outside of policy guidelines. Suitable investments include: project investment &/or financing equities & equity indexes high yield bonds hedge funds private equity or off-loading distressed assets (see Risk transfer below). In Stronghold programs bond buyers can propose performance investments or evaluate investments presented by Stronghold. Reserve Assets supporting Embedded Credit Insurance with Permitted Securities in Trust (Collateralized Insurance Reserves)
Stronghold solutions introduce new tools, which complement and advance such strategies. Non-traditional fixed income strategies have emerged placing more emphasis on credit and specialty finance taking some equity risk to generate returns dependent on business and financed projects performance. Where Pension funds have not developed required expertise in areas, such as sectoral or geopolitical risk, they have begun to partner with third party experts. Pension funds have applied similar approaches in infrastructure, by building leading expertise to enable them to participate in infrastructure projects from start to finish. Private equity strategies have begun to focus on partnerships, investment platforms, and value creation through operational expertise. Increasing dollar-duration of assets, and Optimizing the risk return profile of investments In the current economic environment, pension funds try to: (1) increase contributions and (2) seek higher returns by taking more risk.Īllocating more to illiquid assets (private equity, real estate, and infrastructure), while attempting to identify attractive risk-return profiles ĭiversifying exposure to other risk factors as a means of mitigating equity risk Pension funds face the central challenge to meet their responsibilities to pensioners over time - a challenge made more difficult by economic conditions since the financial crises. Pension Fund Challenges & Current Strategies Stronghold solutions can finance targeted investments & activities for pensions funds providing access to new tools for managers to realize enhanced risk adjusted returns on investment grade holdings