Constructing buyout-ready portfolios for the endgame

As defined benefit (DB) schemes adopt a holding pattern ahead of a potential buyout, our Solutions team – making use of their modelling frameworks – share their insights into how they believe schemes can best invest to meet their objectives.

With dramatically improved funding levels, thanks in large part to the significant rise in gilt yields over the past 18 months alongside a partial recovery in risk-asset prices, the DB market is approaching an inflection point. The demand from schemes that are already – or soon will be – in surplus on a buyout basis is a multiple of the annual capacity of the pension risk transfer (PRT) market.