PI Partnership – Invesco Investment Solutions
market investments can be difficult. It can take a significant amount of internal resource to assess private markets and source compelling risk-adjusted opportunities. These resources are particularly important during the manager selection pro- cess as identifying top performing managers is essential. Additionally, minimum AUM and fee requirements can be too high for some schemes to overcome. Recognising this challenge, we developed our Alternative Solutions Platform to provide streamlined access to Invesco’s specialist in-house alternative capabilities together with high quality investments from leading partner firms. Using this multi- manager platform, pension schemes can benefit from econ- omies of scale and expertise from senior loans and real estate to private credit and infrastructure, with lower mini- mum investment requirements. Furthermore, we can help reduce the administrative burden in terms of monitoring, oversight and reporting.
Conclusion: not so alternative
The combination of the need to de-risk, the need for high income and the rapid growth of the asset class post the 2008 global financial crisis, means that alternative income is no longer so alternative.
Through our analysis and research, we believe alternative income strategies can be highly complementary for many pen- sions schemes at this stage of their funding journey. For all schemes, regardless of size, gaining access to high-quality alternative income investments – whilst reducing the govern- ance burden often associated with private markets – will be key to realising its potential.
Investment risks The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Important information
This marketing material is for Professional Clients only in the UK; It is not intended for and should not be distributed to, or relied upon by, the public or retail inves- tors. Please do not redistribute.
Invesco Investment Solutions develops CMAs that provide long-term estimates for the behaviour of major asset classes globally. The team is dedicated to designing out- come-oriented, multi-asset portfolios that meet the specific goals of investors. The assumptions, which are based on 5- and 10-year investment time horizons, are intended to guide these strategic asset class allocations. For each selected asset class, we develop assumptions for estimated return, estimated standard deviation of return (volatility), and estimated correlation with other asset classes. This information is not intended as a recommendation to invest in a specific asset class or strategy, or as a promise of future performance. Estimated returns are subject to uncertainty and error, and can be conditional on economic scenarios. In the event a particular scenario comes to pass, actual returns could be significantly higher or lower than these estimates. Proxies used: >15y Gilts= Bloomberg Sterling Aggregate Gilts, Linkers= BofA Merrill Lynch UK Inflation- Linked Gilt, Sterling Corporate= Bloomberg Sterling Aggregate Non-Gilts - Corporate, High Yield= Bloomberg Barclays Global High Yield, Global Equity= MSCI World, Hedge Funds= HFRI HF, Real Estate Debt= Preqin Real Estate Debt, Private Credit= Burgiss Senior Private Debt, Infrastructure= Preqin Infrastructure, Real Estate= Preqin Real Esta- te, Private Equity= Burgiss Buyout. This material contains statements that are not purely historical in nature but are “forward-looking statements.” These include, among other things, projections, forecasts, estimates of income, yield or return or future performance targets. These forward-looking statements are based upon certain assumptions, some of which are described herein. Actual events are difficult to predict and may substantially differ from those assumed. All forward-looking statements included herein are based on information available on the date hereof and Invesco assumes no duty to update any forward-looking statement. Accordingly, there can be no assurance that estima- ted returns or projections can be realized, that forward-looking statements will materialize or that actual returns or results will not be materially lower than those presented. Unless otherwise stated, all information and data is sourced from Invesco as of Dec. 31 2021, in GBP. This is marketing material and not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. Issued by Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, United Kingdom. Authorised and regulated by the Financial Conduct Authority.
May 2022 portfolio institutional roundtable: Private markets
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