Recipe for pension investment: mix assets well

Article Abstract:

Pension plan managers face the opposing objectives of reducing investment risk and maximizing returns on investment. These investment managers must also work to minimize plan costs. The risk-return performance of most portfolios is strongly related to its asset allocation policies. Asset allocation decisions are best handled as a four-step process: (1) identifying the pension plan's current funding status, (2) preparing written pension plan investment goals, (3) reviewing investment strategies and determining alternative strategies that could be used, and (4) developing an ideal portfolio, capable of meeting the plan's cash needs without exceeding the plan's acceptable risk level. Asset allocation decisions are explained with reference to a hypothetical pension plan.

Analysis, Portfolio management, Investments

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Tracking down investment managers for a middle-market company

Article Abstract:

Middle-market companies' treasury professionals often have the responsibility for pension investing, and this in turn often entails engaging a professional investment manager. Steps for hiring the investment manager include: coming up with investment guidelines, determining an asset allocation, drafting a request for quotation, publicizing one' needs, collecting and evaluating performance data, choosing finalists, deciding on a manager, negotiating commissions and fees, and monitoring for consistency and performance.

Finance, Investment advisers, Corporations, Corporate finance

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