A New Approach to LDI

This section describes an efficient approach to increase yield on fixed income portfolios - an alternative to alternatives.  In this application, institutions would purchase a series of bonds at regular intervals over time. The performance investments of the protected cell issuing each respective bond would (as example) purchase a 1.5X SP 500 Index exposure.

Historical Analysis

A 50-year historical analysis initiating such Programs monthly, beginning in the early 1970s, computes the time for to meet the redemption target of delivering a cumulative return on a rolling 1-year U.S. Treasury Bill index plus 300 bps. The simulated issues deliver the redemption premium, on average, in under 5 years.

Strategic Use of the Solution

Purchasing a series (ladder) of such bonds over time (quarterly or monthly) would enable institutions to realize reliable risk-adjusted returns at low cost and provide for rolling liquidity, which they can reinvest in future Program bonds, deploy to other investments, or use to meet obligations.

Value Proposition

The solution supplies a risk-adjusted return otherwise unavailable at lower cost than alternative investments in private equity, private credit, or hedge funds. The solution can operate at institutional scale.