Global Asset Management

True Partner plenary session at well-attended Financial Investigator Seminar

Tackling investment risks in the pension transition

Yesterday (25/3/2024) at the Financial Investigator Seminar, Tobias Hekster, Co-CIO of True Partner Capital, delivered an insightful presentation on "Investing under the new pension system." He shared findings from True Partner Capital's comprehensive study on investment risks during the transition from the current system (FTK) to WTP. The presentation was well appreciated by the large audience.

“Many funds would be happy to transition with their current coverage ratios…

…but for many, coverage ratios would be vulnerable in the event of significantly adverse market moves.”

The thesis of the study was to not only look at the overall risks the pension funds run during the transition, but also look at how market shocks in the runup to the transition could impact the distribution of pension assets between the different age cohorts of fund participants.

In the various market-shock scenario’s, different age cohorts may be impacted significantly, leaving some age cohorts notably worse off than others. However, by conducting scenario analysis these risks can be anticipated so that they can be mitigated by hedges. And fortunately, particularly for equity market risks the hedging costs have notably fallen over the past year, making this an attractive option.


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