Webinar: Considerations for LDI Plan Sponsors
Tom McCartan, Principal of Liability-Driven Strategies outlines how LDI investors can take advantage of attractive credit spreads following recent volatility.
Tom McCartan, FIA, CFA, is a Principal of Liability-Driven Strategies at PGIM Fixed Income. Mr. McCartan is responsible for the development of custom LDI solutions for our clients. Prior to joining the Firm in 2015, Mr. McCartan was based in the UK where he spent the last four years at Redington, a London-based investment consultant for UK defined benefit pension plans. At Redington he advised plans on best practice for implementing LDI strategies and led a number of key LDI implementation projects for large UK pension plans. Prior to Redington he worked as an actuarial analyst with Mercer in Belfast. Mr. McCartan received a BSc. with Honors in Actuarial and Financial Studies from University College Dublin and is a Fellow of the Institute of Actuaries, the UK actuarial professional body. He holds the Chartered Financial Analyst (CFA) designation.
Fixed income markets contain a high proportion of investors whose goal of identifying the most attractive relative value is subverted by jurisdictional or self-imposed rules, regulations, and constraints, or is superseded by other non-economic objectives, such as accounting conventions. This, in turn, creates opportunities for total return, multi-sector fixed income investors willing to consider broad investment guidelines and greater degrees of portfolio management freedom. In this paper, we lay out: 1) The fixed income market segmentation we observe and the resultant high dispersion in risk-adjusted reward; 2) Principles for identifying relative value and pitfalls to avoid; 3) An outline of our portfolio construction approach for building multi-sector portfolios.
All information as of March 31, 2021. For purposes of the biographies, the “Firm” is defined as Prudential Financial, Inc. ("PFI"). All PGIM and Prudential named entities are subsidiaries or affiliates of PFI. PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.