The UK’s largest pension fund has struck a deal that its trustees hope will improve decision making and provide better outcomes for its members.
The Universities Superannuation Scheme (USS), which has £56bn under management, is to use Ortec Finance’s asset-liability management (ALM) software in its investment process.
This is not the first time Ortec, an investment decision technology specialist, has worked with the fund that serves more than 373,000 university lecturers. USS has been using Ortec’s performance measurement, attribution and ex-post risk reporting service since 2014, with the aim of improving outcomes.
USS chief risk officer, Guy Coughlan, said this latest agreement looks to enhance the strategic management of the scheme’s assets and liabilities.
“Understanding the risks our scheme faces, as well as the impact of different economic scenarios and investment strategies, is crucial for effective risk management and the delivery of the best possible outcomes for members and sponsors,” he added.
“Ortec’s ALM solution is unique in meeting our needs in terms of blending sophisticated long-term risk modelling with the flexibility to incorporate dynamic investment and risk management strategies,” Coughlan continued.
Ortec Finance managing director Lucas Vermeulen explained that the ALM system helps manage and improve a trigger-based investment strategy, which takes into account assets, liabilities and sponsor contributions.
“Ortec’s ALM solution enables companies to gain valuable insight into the key strategic benefits of investment strategies, manage and understand risk and return trade-offs, and enhance decision making,” Vermeulen said.
“Combining our existing investment performance service work with our ALM solution means we can work with USS to help adopt a consistent framework for ex-ante risk and ex-post performance analysis,” he added.
“We therefore look forward to working with the scheme to ensure specific goals and objectives continue to be met in both their short and long-term strategies.”
