PH&N Institutional has been designing and implementing custom LDI solutions since 1992. Our LDI practice is among the most experienced in Canada, and is supported by our sophisticated risk management systems, as well as our ability to incorporate a suite of global investment strategies.
Our competitive advantage
Over 30 years experience of designing and implementing innovative LDI solutions
Dedicated and experienced team of investment and pension specialists with actuarial backgrounds
Access to specialized credit, alternative, and equity expertise from RBC Global Asset Management’s (RBC GAM) global investment teams
Proprietary portfolio and risk management systems and infrastructure
Long-term partnerships focused on client objectives and success
Customized solutions for each client’s objectives
At PH&N Institutional, we specialize in designing LDI mandates tailored to the specific objectives and risk tolerances of each client. Our disciplined approach to portfolio construction includes:
- Consulting with clients to define their specific objectives and investment challenges
- Conducting rigorous analysis to model potential solutions
- Determining the most appropriate solution to meet client objectives
Our sophisticated toolkit and flexible approach enable us to provide a range of investment strategies, from pure interest rate hedging to more complex designs incorporating return-seeking asset optimization, derivative overlays and dynamic de-risking.
The following diagram illustrates the range of client objectives and corresponding PH&N Institutional solutions/offerings:
De-risking spectrum
Client objective
Reduce interest rate risk
Reduce interest rate risk
Interest rate risk is managed very closely in our LDI mandates. The interest rate exposure of the asset portfolio is structured to efficiently track the interest rate exposure of the liabilities and to achieve the desired hedge ratio.
Client objective
Enhance portfolio yields
Enhance portfolio yields
We use the recognized and proven credit expertise of our specialized internal credit teams, such as the PH&N corporate credit and mortgage teams, in order to increase the yield of the portfolio while managing the risk versus the liabilities.
Client objective
Diversify return-seeking assets
Diversify return-seeking assets
We offer a broad range of return-seeking strategies for LDI clients delivered by specialized RBC GAM investment teams located around the world. Our strategies include objective-oriented equities (such as low volatility funds), global credit, real estate and a variety of absolute return investments.
Client objective
Dynamic adjustment of asset allocation
Dynamic adjustment of asset allocation
We use proprietary portfolio and risk management tools such as BondLab to create and manage glide paths, monitor exposures and produce comprehensive client reporting packages.
Client objective
Risk transfer & risk retention solutions
Risk transfer & risk retention solutions
Our relationship with RBC Insurance provides clients with an efficient means of transitioning investment and non-investment related risks.
Our offering
- Liability customized portfolios
- Levered-duration strategies
Our offering
- Deep and experienced corporate credit team
- Broad access to global credit markets
Our offering
- Objective oriented equities
- Global credit
- Low volatility equities
- Real assets
- Absolute return strategies
Our offering
- Closely monitored glide path triggers (market & funding)
- Dashboard reporting
Our offering
- Portfolio transition for annuity purchases
- Hibernation portfolios
Client objective
Reduce interest rate risk
Reduce interest rate risk
Interest rate risk is managed very closely in our LDI mandates. The interest rate exposure of the asset portfolio is structured to efficiently track the interest rate exposure of the liabilities and to achieve the desired hedge ratio.
Our offering
- Liability customized portfolios
- Levered-duration strategies
Client objective
Enhance portfolio yields
Enhance portfolio yields
We use the recognized and proven credit expertise of our specialized internal credit teams, such as the PH&N corporate credit and mortgage teams, in order to increase the yield of the portfolio while managing the risk versus the liabilities.
Our offering
- Deep and experienced corporate credit team
- Broad access to global credit markets
Client objective
Diversify return-seeking assets
Diversify return-seeking assets
We offer a broad range of return-seeking strategies for LDI clients delivered by specialized RBC GAM investment teams located around the world. Our strategies include objective-oriented equities (such as low volatility funds), global credit, real estate and a variety of absolute return investments.
Our offering
- Objective oriented equities
- Global credit
- Low volatility equities
- Real assets
- Absolute return strategies
Client objective
Dynamic adjustment of asset allocation
Dynamic adjustment of asset allocation
We use proprietary portfolio and risk management tools such as BondLab to create and manage glide paths, monitor exposures and produce comprehensive client reporting packages.
Our offering
- Closely monitored glide path triggers (market & funding)
- Dashboard reporting
Client objective
Risk transfer solutions
Risk transfer solutions
Our relationship with RBC Insurance provides clients with an efficient means of transitioning investment and non-investment related risks.
Our offering
- Buying annuities
- Portfolio transition for annuity purchases
- Hibernation portfolios
Empowering institutions with advanced LDI solutions
Our LDI practice is among the most experienced in Canada, and is supported by our sophisticated risk management systems, as well as our ability to incorporate a complete suite of global investment strategies.
Specialized and highly experienced LDI team
PH&N Institutional’s LDI team possesses a deep understanding of the investment challenges faced by our clients. This understanding is founded on their aggregate multi-decade experience as actuaries, pension specialists, plan sponsors, investment consultants, and investment managers.
The team is comprised of:
- 15 Investment professionals
- 11 are CFA charterholders
- 9 have actuarial experience
Data as of Dec 31, 2024
The LDI team is supported by a comprehensive network of specialized personnel and systems that assist them with delivering customized solutions that address each client’s unique investment objectives and reporting needs. In addition to leveraging the capabilities of RBC GAM’s 17 global investment teams, the LDI team has access to our dedicated Institutional Portfolio Solutions (IPS) team and RBC Quantitative Investments team.
A team dedicated to building efficient portfolios
PH&N Institutional has a long history of bringing together our specialized quantitative modelling, portfolio management, risk, and asset allocation expertise in support of client objectives. We formalized our efforts in this regard with the establishment of our IPS team.
The LDI team has access to 17 global investment teams, including our dedicated Institutional Portfolio Solutions (IPS) team and RBC Quantitative Investments team.
Pooled & segregated solutions
Over the years, we have developed a series of fixed income pooled funds that enable us to implement most custom fixed income mandates on a pooled basis. Sometimes a combination of pooled funds and segregated securities is used. As many of our clients incorporate derivative strategies, we have well-developed capabilities in derivatives use and risk management.
Our fixed income pooled funds offer diverse term structure, credit, and liquidity exposures, and can be combined to meet each client’s targeted interest rate, credit, and liquidity objectives. Below is a graphic of the pooled funds we generally use when implementing customized fixed income LDI mandates.
Systems & tools used in risk and portfolio management
The most important system we use to analyze both assets and liabilities is BondLab, a proprietary tool developed by our Quantitative Research Group (QRG). BondLab features the following capabilities:
- Provides raw data for more than 48,000 domestic and global securities, populated every trading day
- Provides valuable insight into portfolio risk exposures and security-specific opportunities
- Provides daily risk exposure information of the assets and the liability benchmark
- Allows us to produce customized reporting according to each client’s reporting needs
Client service
PH&N Institutional is distinguished by our service-oriented culture, which is based on partnering with clients to deliver customized investment solutions and reporting, as well as educational support to understand the decisions that are implemented in their portfolios. As a testament to the high standard of client service that we have set, PH&N Institutional continues to score highly year after year on the Greenwich Associates Quality Index for Client Service1.
Tailored client solutions & support
Our clients represent the entire spectrum of Canadian institutional investors, including defined benefit, target benefit and defined contribution pension sponsors, health and welfare plans, endowments, foundations, insurance companies, and indigenous communities.
1 PH&N Institutional was named a 2024 Greenwich Quality Leader in Overall Canadian Institutional Investment Management Service Quality (details available here). Greenwich Quality Leaders are distinguished for providing the industry’s highest-quality service as determined by Canadian institutional investors. We have been recognized as a Greenwich Quality Leader for the past eleven years.
Custom fixed income solutions for LDI clients
Our liability-driven investing (LDI) process starts with defining and understanding the client’s situation, objectives, and risk tolerances. One key piece of this is to understand the role of the fixed income mandate in the context of the total portfolio.