As a longstanding partner to numerous Canadian institutional investors, we understand that each entity faces unique investment challenges. Consequently, all institutional clients have access to the Institutional Portfolio Solutions (IPS) team, a specialized group dedicated to providing portfolio analytics and quantitative risk modelling to help stakeholders assess the risk/reward impact of different strategic investment decisions and make informed, prudent choices.
Since the formal establishment of the team in 2015, they have worked extensively with institutional investors of all sizes, spanning an array of different entities such as pension plans, foundations, endowment funds, Indigenous trusts, and family offices.
About the Institutional Portfolio Solutions team
The analyses produced by IPS are supported by their proprietary modelling tools, all developed and maintained internally to allow for maximum flexibility when working with clients. Team members bring with them specialized experience from backgrounds in investment consulting, risk management, financial engineering, and actuarial science, all of which are additive to the client advisory experience that supports decision making.
Modelling & analytics
Proprietary, leading-edge modelling tools provide meaningful and actionable information.
The team’s tried and tested approach to portfolio analysis and solution design when working with clients on investment policy strategy is depicted below. While IPS follows the same process with every investor, the scope and complexity at each step will vary by situation, tailored to each client's specific circumstances.
Define investment goals to enable informed decision making and positive outcomes.
Different types of investors
Insurance
Indigenous trust
Pension plan
Family office
Endowment & foundation
Distinct institutional goals
Meet spending commitments
Minimize funding volatility
Long-term capital growth
Generate stable income
Maintain purchasing power
Preserve multi-generational weath
Unique investment trade-off
Risk tolerance
Reward metric
Constraints
Customized portfolio solution
Strategic asset allocation
Asset classes should align with investment objectives and fiduciaries should be comfortable with all potential exposures.
Investment opportunity set
Fixed income
Money market
Government
Investment grade corporate
High yield
Emerging market
Multi-asset global credit
Etc.
Equities
Large cap
Small cap
Developed market
Emerging market
Low volatility
Etc.
Alternatives
Absolute return
Commercial mortgages
Private debt
Private equity
Real estate
Infrastructure
Etc.
Proprietary modelling tools help identify the balance of risk and reward opportunities.
1
Define the appropriate analysis
Asset-only
Asset-liability
Market value/spending
2
Specify the correct risk/ reward trade-off
Return vs. volatility
Excess return vs. surplus risk
Spending vs. capital preservation
3
Identify portfolio candidates with superior risk/reward profiles
*Chart is for illustration purpose only
Adapt the solution to market realities and practical considerations to increase the odds of success.
Optimized
Optimization is driven by best-estimate assumptions that can sometimes lead to impractical or concentrated portfolios
Add allocation to foreign fixed income.
Reduce home country bias in equities.
Increase liquidity in alternatives.
Proposed
A portfolio that is sufficiently close to the theoretical frontier but with qualitative adjustments could be preferable
Domestic fixed income
Domestic equities
Liquid alternatives
Foreign fixed income
Foreign equities
Private alternatives
*Charts is for illustration purpose only. Asset mix is subject to change.
The IPS team's analytics and advisory services are available to all PH&N Institutional clients, reflecting our commitment to their long-term success and partnership.
Different types of investors
Distinct institutional goals
Unique investment trade-off
Customized portfolio solution
