Liquidity Management For Investment Professionals
Liquidity ManagementSecurity, liquidity and return potential for clients
Active cash investment solutions, harnessing the expertise of one of the UK’s leading investment managers.
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Liquidity Management
Legal & General Investment Management (LGIM) is one
of Europe’s largest asset managers and a major global
investor, with total assets of £853 billion*. We work
with a wide range of global clients, including corporate
investors, sovereign wealth funds, fund distributors,
retail investors and pension schemes.
Throughout the past 40 years we have built our business
through understanding what matters most to our clients
and transforming this insight into valuable, accessible
investment products and solutions.
We provide investment expertise across the full spectrum
of asset classes including cash, fixed income, equities
and commercial property. Our capabilities range from
liquidity management to liability-based investment
solutions.
LGIM has been managing cash assets for over 40 years
and is one of the UK’s leading providers of liquidity
solutions. Throughout this time we have proven our
ability to navigate a wide variety of market environments,
including several periods of elevated volatility and
multiple interest rate cycles.
Liquidity capabilities at Legal & General Investment Management
Liquidity capability milestones
LGIM founded 1970
Money Markets
since 1972
1980 1985 1990 1995 2000 2005 2010 2015
Cash Fund
(VNAV)
Black
Monday
UK leaves
ERM
Asian financial
crisis
Global
financial
crisis
European
Sovereign
debt crisis
Liquidity (CNAV)
Financial market events
*As at 30 June 2016, including derivative positions and advisory assets.
Liquidity (VNAV)
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Liquidity Management
An award-winning manager
We put our clients at the heart of everything we do, and
this drives our approach from client service to product
development and investment management. The success
of this philosophy has been regularly recognised with
numerous industry awards.
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Liquidity Management
Through our Sterling, Sterling Plus and US Dollar
Liquidity Funds, we offer investors an actively managed
alternative to short-term bank deposits, which meet the
Institutional Money Market Funds Association (IMMFA)
Code of Practice. We also offer clients a range of bespoke
liquidity solutions.
Our Liquidity Funds aim to provide security, liquidity
and a competitive return.
SECURITY
• The LGIM Liquidity Funds’ primary objective is capital
preservation
• Funds are well diversified across a number of high-
quality issuers and money market instruments
• All cash fund holdings are researched comprehensively
on a global basis by LGIM’s credit teams
• The LGIM Sterling Liquidity and LGIM US Dollar
Liquidity Funds carry a Standard & Poor’s AAAm
rating, a Moody’s Aaa-mf rating, and a Fitch AAAmmf
rating
LIQUIDITY
• Daily dealing with no-lock in periods
• Daily stress testing to assess our ability to meet large
redemptions
• LGIM employs a liquidity policy which requires the
funds to hold a significant proportion of assets that
mature within a week
Providing security, liquidity and return potential
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Liquidity Management
COMPETITIVE RETURN POTENTIAL
• The LGIM Sterling Liquidity Fund has consistently
been in the first or second quartile each calendar
quarter since launch*
• As one of the largest investors in the market place,
LGIM can obtain competitive market pricing through
scale – a benefit passed on to our clients
COMPETITIVE FEES
• Transparent fee structure
• No fees applied by the fund for subscriptions or
redemptions
*Source: LGIM, as at 30 August 2016, Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up. Captial is at risk.
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Liquidity Management
Ret
urn
Duration / credit risk
• Variable NAV (VNAV)
• 3m LIBOR +150/350
• Variable NAV (VNAV)
• 3m LIBOR +20
• T+2 liquidity
• Constant NAV (CNAV)
• 7 day LIBID +10
• T+0 liquidity
• Client-specific investment guidelines
• Liquidity requirements based on clients’ cashflow projections
• A dedicated cash management team, portfolio management and relationship manager
Flexible bespoke solutions
Liquidity Funds
Liquidity Plus Funds
Absolute Return Bond
Funds
The LGIM cash fund range at a glance
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Liquidity Management
A key differentiator is our macro-driven thematic
investment process. We focus on the long-term outlook
and seek to identify market turning points, helping us to
target attractive performance across the market cycle.
• Client focused: We are committed
to delivering solutions that help
achieve your ultimate investment
objectives
• Emphasis on risk management:
We have a strong risk management
culture, encompassing credit,
interest rate and liquidity risk
• Cash management expertise:
Liquidity management forms
a strategic part of LGIM’s asset
management capability. We
dedicate significant resources to
liquidity management and fixed
income. Over 70 investment
professionals feed into our global
fixed income investment process
and together manage in excess of
£126 billion1. LGIM manages one
of the largest sterling liquidity
funds2 and offers tailored liquidity
investment solutions to a wide
range of international clients
WHY LGIM FOR LIQUIDITY MANAGEMENT?
MACRO
Macro themes act as an anchor for
portfolio construction
CREDIT
Fundamental research focused on
the evolution of credit quality
RISK MANAGEMENT
Analysis and controls to ensure
consistency with portfolio
objectives
1 As at 30 June 2016.
2 LGIM Sterling Liquidity Fund, Fund size £27,360m, Valuation date 31 August 2016.
The active LGIM investment approach
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Liquidity Management
CONTACT US FOR MORE INFORMATION
Ian Lloyd, Head of Liquidity Distribution
+44 (0)20 3124 4360
Simon Allison, Liquidity Distribution Manager
+44 (0)20 3124 3584
Legal & General Investment Management,
One Coleman Street, London, EC2R 5AA.
Key considerations and risks
Investing in financial markets exposes investors to risk. Investing in a broad range of fixed income instruments meansadverse moves in interest rates, poor performance by the companies issuing the bonds and exchange rate fluctuations mayall lead to losses. Derivatives may also be used for efficient portfolio management as well as investment purposes. Theunderlying investments will not exactly match changes in the value of a pension scheme’s liabilities and schemes will needto be able to generate sufficient return in order to meet liability cashflows. Further details (including relevant risk factors andfund specific risks) are available from your usual LGIM contact.
Important Notice
This document is produced by Legal & General Investment Management Limited. It is for the exclusive use of the recipientand is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of orlocated in any locality, state, country or jurisdiction where distribution, publication, availability or use of this document wouldbe contrary to law or regulation. This document is provided for information purposes only and does not constitute an offer ora recommendation to buy or sell securities or financial instruments.
The information in this document does not take into account the specific or future investment objectives, financial or taxsituation or particular needs of any recipient. Tax treatment of the subscription, holding and redemption of shares in the funddepends on individual circumstances and may be subject to change. Before making any investment decision, investors arerecommended to assess whether this investment is suitable for them in light of their financial knowledge and experience,investment objectives and financial or tax situation and to obtain specific advice from an investment professional.
Any investment involves risks, especially with regard to fluctuations in value and return. No guarantee can be given thatthe fund will achieve its objective, or reach or outperform the performance of its benchmark, if any. Investments in foreigncurrencies involve the additional risk that the foreign currency might lose value against the investor’s reference currency.Historical performance indications and financial market scenarios are no guarantee for current or future performance.Performance indications do not consider charges levied at subscription and/or redemption.
Legal & General Investment Management is authorised and regulated by the Financial Conduct Authority. To ensure quality ofservice and for the protection of all parties, telephone calls may be recorded.
© 2016 Legal & General Investment Management. All rights reserved. No part of this document may be reproduced in wholeor in part without the prior written consent of Legal & General Investment Management.
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