LCP has launched a new illiquid asset solutions group to help pension schemes optimise their strategies for illiquid asset holdings as part of their journey to buy-in or buyout.

The group’s creation follows significant improvements in defined benefit (DB) pension funding levels.

It includes experts from LCP’s longevity de-risking team and its investment team.

The group will aim to centralise best practice, and push forward innovation in the market, and evolve both existing and new solutions to equip trustee boards and sponsoring employers with the tools to meet their objectives.

LCP said that the imbalance was created by the improvement in buyout funding levels over the past 12 months, drive by higher gilt yields and favourable insurer pricing, which has accelerated the average scheme’s journey plan by five years.

Many schemes are therefore targeting buy-in where they can afford to insure benefits earlier than they expected.

However, LCP said this would only be possible if they are able to design the right strategy to incorporate their illiquid asset holdings in a cost-effective way.

“Finding creative solutions for illiquid assets to facilitate a buy-in is a hot topic for many pension schemes,” commented LCP partner, David Salter.

“With a wide range of options available, developing a tailormade approach is vital to ensure no unnecessary loss of value.

“Our new group brings schemes cutting edge illiquid assets experience drawing on work from some of the UK’s most complex buy-in transactions.

“We are ready to use this experience to help schemes break down the barriers associated with illiquid assets and take advantage of the opportunities in the current market.”

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