Last updated: 09:44 / Monday, 13 June 2016
Advanced tailored solutions

How Lyxor’s Enhanced Architecture Program Can Boost European Pension Funds’ Performance

How Lyxor’s Enhanced Architecture Program Can Boost European Pension Funds’ Performance

Europe’s pension funds face significant challenges as a result of low interest rates, volatile markets and regulatory constraints. Lyxor’s Enhanced Architecture Program (LEAP) helps institutional investors address these challenges.

The program offers its participants significant cost reduction, reporting, risk management, governance and return benefits. Amber Kizilbash, Global Head of Sales and Client Strategy at Lyxor Asset Management, explains how LEAP works and why operational effectiveness is such a hot topic.

“Pension funds face increasingly urgent demands to improve their overall performance. Lyxor’s Enhanced Architecture Program (LEAP) empowers them to achieve a step change in their infrastructure and investment effectiveness, via a collaborative, top- down approach. It is a modular, open architecture program from which investors can choose either a comprehensive  duciary management solution or individual modules”, explains Kizilbash.

Lyxor experts offer clients a range of specialist skills, such as the design of the legal and infrastructure framework, the negotiation of service provider agreements, risk management, fund selection and management.

A successful LEAP implementation can result in significant eficiency gains, offering better value for money for the pension funds’ ultimate clients saving for retirement.

LEAP benefits pension funds in two ways.

The first is by enhancing funds’ infrastructure, thereby increasing operational effectiveness. Many pension funds suffer from a duplication of roles amongst service providers, both across schemes and across countries. This duplication of efforts leads to a sub-optimal cost structure and a challenge in ensuring effective governance.

The second way in which LEAP helps investors is by providing access to state-of-the-art investment solutions. Many large pension funds have access to sophisticated in-house investment resources as a matter of course. LEAP puts these capabilities at the disposal of small and medium-sized pension funds, which may lack the scale to run such investment programs on their own. Via LEAP, Lyxor accompanies clients in implementing advanced tailored solutions along the full investment value chain, from liability-driven investment (LDI) and strategic asset allocation up to fund selection and management.