Forethought Risk

Analysis of Asset-Liability Gaps

In order to fully understand the risk of your fund, you must quantify the exposure gaps between the liabilities your fund is contracted to pay and the assets backing those liabilities.  Forethought Risk has actuarial and investment expertise suited to perform this analysis for your fund.

Asset Mix Determination

What is the ideal asset mix for your pension fund?

Forethought Risk can help your fund determine the appropriate asset mix based on funding ratio, risk tolerance and overall risk exposure of plan sponsor's organization

Risk Management

Once the asset-liability gap has been quantified and an appropriate asset mix has been determined, Forethought Risk can provide the highest standards of risk management as an outsourced middle office function.  We will ensure your pension fund retains sufficient liquidity for required payouts and maximizes its return to risk ratio.

Risk Reporting

Forethought Risk will assist your organization in obtaining customized reports which detail the asset-liability gap and the concentration of asset risks.  We will also provide your pension fund with customized time series analysis of risk versus return.

For more information on the importance of ex-ante and ex-post risk reporting see this article.

Contact us for a presentation on risk reporting.

Evaluation of Investment Strategy

Forethought Risk is considered a thought leader in the pension fund world.  We have advised on liability-driven investing (LDI) mandates as well as use of derivatives and alternative asset classes by pension funds.  With actuarial and investment management expertise fused together, we can provide a different viewpoint than traditional consulting organizations.  

Investment Policy Assessment

Forethought Risk can review your fund's investment policy to ensure it remains consistent with the goals of the plan sponsor's organization.  We are thought leaders with respect to liability-driven investing, uses of derivatives for plan sponsors and alternative asset classes.  When appropriate, we can ensure the investment policy remains sufficiently flexible to capture changes in the regulatory and investment marketplace.

Performance Attribution

Forethought Risk can help your pension fund determine sources of return for its assets.  This analysis can ensure investment managers remain consistent in their strategies and do not veer from their core strengths without previous consent from the fund.  For example, an equity manager with a consistent record for stock-picking should not be exposing the fund to market-timing trades.  Similarly, a fixed income manager hired for its core capabilities in credit analysis, should not assume consistent duration exposure.