Investment of Pension Fund Assets and Pension Scheme Governance and Regulation Toolkit

Dates: 21 October - 1 November 2024

This two-week programme combines:

• Investment of Pension Fund Assets: Portfolio Management and Investment Analysis - 5 days
• Pension Scheme Governance and Regulation- 5 days

Pension schemes face a set of complex and often difficult challenges relating to the investment of its assets, emanating from, inter alia, the need to grow the real value of pension funds by generating investment returns on one hand whilst assuring the preservation of members’ capital on the other within often tight regulatory strictures. The sheer size of pension schemes’ assets relative to investment markets creates challenges unique to institutional investors who must carefully manage entry and exits into investment positions. As pension scheme assets globally fall further behind the liabilities that they are intended to fund, and yields continue to fall, the requirement for regulatory reform driven from the “bottom up” under advisement from those responsible for schemes “at the coal face” has increased.

Week one builds delegates’ investment oversight knowledge from first principles by examining the current landscape of pension fund investment and the key tenets of investment analysis – including valuation techniques – and portfolio management theory and practice. The mainstream asset classes in pension fund investment, viz. bonds and equities are covered in detail and the course also provides an introduction to alternative investment classes including Real Estate, Private Equity and Infrastructure and their role in enhancing portfolio diversification and risk-adjusted returns. 

Week two focuses on pension scheme governance and regulation, taking delegates through the roles, risks, issues and processes involved in protecting the rights and members of all beneficiaries; the challenges of pensions’ roles in improving financial inclusion; and the different regulatory models and challenges involved in protecting the interests of pension schemes.

Course Objectives

On completion, you will be able to:

• Understand the principal asset valuation techniques
• Appreciate the limitations of public security investment
• Analyse the risks and return potential of the major asset classes
• Understand the tenets of modern portfolio theory
• Appreciate the potential benefits of, and risks pertaining to, private market investment
• Analyse the key risks of different asset types
• Appreciate the increasingly important societal and economic role of pensions
• Understand fiduciary responsibilities to stakeholders in scheme management
• Analyse the cash flow needs of the scheme vis-à-vis investment opportunities
• Appreciate the role of pension system regulators
• Understand recent initiatives towards more holistic and inclusive systems

Key Topics

• Risk pricing across the principal asset classes
• Equity market analysis and valuation techniques
• The role of bonds and money market securities in pension funds
• Bond valuation and key risk measures including duration
• Analysing the risk and return profiles of Private Equity and Infrastructure investment
• Understanding asset-liability risk from a pension fund perspective
• The critical role of liquidity in contemporary investment
• Risk management and the role of derivatives
• Pension scheme roles of Regulators, Trustees and other responsible parties
• The pivotal role of pensions in contemporary economies
• Poor performance of pension scheme assets and investment managers
• Building confidence in pension systems and individual schemes
• Challenging advisors and service providers to deliver greater value
• Strategic initiatives, e.g. increased scale, internal investment management
• The wider stewardship role of pension schemes in the future