At Brightwell, we appreciate the complexities involved with running a DB scheme, understanding the factors that influence assets, liabilities and corporate sponsors.
We offer a truly holistic approach, which is fully integrated with other areas of pension management – such as pension administration and advisory, valuation support, funding solutions and longevity hedging.
We have a strong track record of advising on and delivering agreed outcomes for investment and funding.
DB pension schemes share a common objective: to ensure there are sufficient assets to pay the right benefits at the right time to members and their beneficiaries under the rules of a scheme.
Working on behalf of BTPS, the Scheme’s deficit has reduced from c. £11bn in 2019 to c.£3.7bn in 2023 – with the Scheme on track to be fully funded by 2030.
£11 bn
deficit in 2019
£3.7 bn
deficit in 2023
Certainty in uncertain times
Ensuring pension schemes can meet their annual cash flows to members and their beneficiaries involves careful management of scheme assets and in-depth understanding of the risk factors that can affect scheme funding outcomes.
Examples of these risks include:
- UK interest rates
- UK inflation
- Liquidity & cash flow risk
- Longevity
- Sponsor covenant risk
- Currency risk
- Climate change
- Asset risk
Mandate design and manager selection
The design of investment mandates, third-party manager selection and ongoing monitoring is an integrated process.
The Brightwell investment team targets a portfolio of mandates that align to specific outcomes, designs mandates that optimally capture desired asset-class, risk-factor or cashflow characteristics, and selects managers that generate alpha net of fees and costs.
We view the traditional “P” factors of manager selection – philosophy, process, people, performance and propriety – as essential, but forming only the baseline criteria for selection as they are insufficient for determining success over the long term.
We favour fewer but longer-term partnerships with managers, low manager turnover (which helps reduce cost) and customisation of our investment mandates.
Innovative solutions to complex problems
Brightwell worked with BTPS on the largest longevity hedge in the UK in 2014 and developed an innovative solution to deal with trapped surplus as part of the 2020 valuation negotiation with BT Group.
“BTPS is a top UK fund not just in size but in innovation, such as the vehicle to deal with trapped surplus, while its ambition to be net zero by 2035 is well ahead of the industry.”
IPE judges’ comment on BTPS being awarded the UK country award in 2021.
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