The Pension Protection Fund (PPF) has, published its revised Statement of Investment Principles.
The changes include:
- Revisions to the strategic allocations of the Permitted Asset Classes (Please see notes) - Introduction of a Hybrid asset strategy
The PPF holds a conservative investment approach and has recently evolved the risk budget with the addition of illiquidity as a separate risk factor. The Statement of Investment Principles reflect the PPF’s commitment to delivering its 2030 funding target through prudent and effective management of the balance sheet.
Barry Kenneth, Chief Investment Officer, comments, “The revisions are consistent to our approach to risk, continued 2030 goal and also reflect the long term nature of our liabilities. We are now allocating more of our capital to less liquid assets where we also receive excess return and liability matching properties. “
“Our investment strategy remains robust thanks to our successful principles and is a major contributor to our balance sheet. Our strategy has achieved numerous awards and continues to be well-recognised and highly praised in the industry.”
Within the revisions to the current spread of Permitted Asset Classes, the PPF has introduced a specific Hybrid asset class. The strategy allocation involves increased allocation to illiquid assets with hedging characteristics. Building Alternative, Hybrid and LDI assets and reducing assets across Equities and Government Bonds will enable the PPF to better generate steady cash flows in the long term. The PPF aims to move to the strategic allocation within the next three years.
The Statement sets out the PPF Board’s principles and policies governing the investment of its assets. It demonstrates the Pension Protection Fund’s commitment to managing its assets effectively and appropriately to balance the interests of both levy payers and beneficiaries alike.
Read the latest Statement of Investment Principles here.
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