Manulife Asset Management, the global asset management arm of Canada-based financial services group Manulife, has adopted RiskFirst’s risk analytics and reporting platform, PFaroe.
PFaroe’s risk analytics will complement Manulife Asset Management’s current Liability-Driven Investment (LDI) offering, enabling the asset manager to stress-test clients’ pension plans against economic and demographic assumptions and explore the impact of alternative portfolio allocations in order to drive more effective solutions. Manulife Asset Management runs approximately C$16 billion (around US$12 billion) in customised LDI strategies for North American pension plans.
Eric Menzer, Global Head of Pension & Risk Management Solutions, Manulife Asset Management, comments: “We have a strong 17-year track-record of implementing LDI solutions in North America. PFaroe is a flexible system that will complement our existing capabilities, allowing us to stress-test the impact of certain capital markets and economic assumptions across both assets and liabilities, run scenarios and look at value-at-risk in a more holistic manner. It also allows us to use this information to test alternative portfolio recommendations and understand their risk and return impact in the asset-liability space.”
Menzer adds: “By helping clients to have a better understanding of the interaction between assets and liabilities we can then implement even more effective solutions. This is a critical step in helping plan sponsors reduce funded status volatility, risks associated with large unexpected contributions and, ultimately, get to fully funded status. PFaroe is an easy-to-use tool that fits well alongside our already robust proprietary LDI modelling and investment management capabilities, giving us the flexibility to incorporate our own proprietary capital market outlooks and assumptions into the LDI investment decision making process.”
Matthew Seymour, Managing Director, RiskFirst, comments: “Manulife is one of the world’s leading financial institutions, so it is with great pleasure that we welcome their asset management business as a client. Manulife Asset Management has a very strong and sophisticated LDI team, strengthened even further recently, through the January addition of Standard Life Canada’s asset management business. They are thought leaders within the field of LDI, as evidenced by their patented system for pension de-risking. Having PFaroe chosen by a team of this calibre is a huge endorsement of PFaroe and our on-going efforts to improve pension risk management. We are confident that PFaroe’s detailed and granular analytics will further enhance their customised services to clients.”