TPT Investment Management teams up with MSCI to create innovative risk management solution

• The solution enhances portfolio risk management capabilities for the group’s fiduciary management clients

• The collaboration integrates industry-leading risk identification and management tools, providing a holistic investment framework

• The solution also integrates Environmental, Social, and Governance risks

The solution enhances TPTIM’s portfolio risk management capabilities by delivering a holistic view of risk across both public and private market assets and enabling analysis of asset risk relative to liabilities. The offering includes analytics that support TPTIM in building a stronger risk governance framework, enhancing investment decision making and improving the ability to communicate risk information to clients.

The risk management solution leverages MSCI’s robust analytics to evaluate individually specific asset risks. This granular approach, supplemented by modelling individual liability cashflows, provides a comprehensive view of the portfolio's risk profile, helping to solve a long-standing industry challenge of combining disparate views of risk. By assessing each asset individually and as part of the wider portfolio, TPTIM can better understand and mitigate specific risks, leading to more informed investment decisions helping build more resilient portfolios. Additionally, the solution also facilitates a detailed perspective on deficit at risk and funding ratio at risk, enabling more precise management of these critical factors when assessing funding risks.

Lee Phillips, Head of EMEA Analytics Coverage, MSCI, comments:  

"We are pleased to collaborate with TPTIM to deliver timely and accurate analytics for integrated asset-liability risk management. MSCI's expertise in public and private asset modelling is aligned with the needs of pension schemes seeking insight into the main drivers of risk, facilitating risk-aware decisions on asset allocation and funding objectives. This collaboration helps support TPTIM in achieving their organizational objectives and driving growth for their clients."

The solution represents an evolution from standard industry practice, where different perspectives on assets and liabilities were combined to produce a single deficit at risk figure. Unlike traditional methods, this approach integrates these views more cohesively for enhanced analysis and provides insights into the contributing factors behind this metric. Such a breakdown allows TPTIM to address sources of risk more effectively and implement targeted strategies to mitigate specific risk factors. Moreover, the solution enables measurement of active risk with respect to the liabilities, offering a nuanced understanding of a portfolio by quantifying the impacts of market fluctuations on its deficit, and adjusting strategies accordingly to maintain desired risk levels.

The solution also integrates views on Environmental, Social, and Governance risks, maintaining TPTIM’s commitment to responsible investing. It incorporates climate data from MSCI to assess the impact on portfolios from climate-related risks and opportunities. This further informs investment decisions, allowing for the identification and management of potential environmental impacts on assets, while embedding climate risks within stewardship practices.

Nicholas Clapp, Managing Director of TPT Investment Management, comments: 

“Our collaboration with MSCI aptly represents our forward-thinking approach to portfolio management by integrating advanced risk tools and sustainability considerations with the aim of building more resilient investment portfolios. The solution provides our clients with detailed and comprehensive insights into total portfolio risk, significantly improving portfolio management. The partnership not only strengthens our fiduciary capabilities but also underscores our commitment to adopting innovative solutions, integrating industry-leading strategies that bring substantial benefits for our clients and stakeholders.”

Notes to Editors

TPT Retirement Solutions (TPT) is one of the UK’s leading providers of workplace pensions with over 75 years’ experience of managing defined benefit and defined contribution pension schemes. It has £9.6 billion of assets under management (as at 30 September 2023) and more than 450,000 members.

TPT’s mission is to make pension schemes perform better for everyone, from the sponsoring employers and trustees to the members who are saving for the future. It is an innovative, forward-thinking organisation, investing in technology to improve the services they provide. TPT is ultimately owned by a pension fund, providing genuine alignment of interests with those of its clients and scheme members.

Our ownership

TPT Retirement Solutions Limited is wholly owned by Verity Trustees Limited in its capacity as trustee of The Pensions Trust. 
TPT Investment Management Limited is a wholly owned subsidiary of TPT Retirement Solutions Limited.

Group Services & Regulation

Verity Trustees Limited is the corporate trustee of The Pensions Trust and The Pensions Trust 2016. It is a company limited by guarantee and is regulated by The Pensions Regulator. Registered in England and Wales under company number 00744017. Registered office: Verity House, 6 Canal Wharf, Leeds, LS11 5BQ

TPT Retirement Solutions Limited provides pension management and administration services to UK pension schemes. Registered in England and Wales under company number 09639961. Registered office: Verity House, 6 Canal Wharf, Leeds LS11 5BQ

TPT Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FCA) and provides investment management and consultancy services to UK pension schemes. Registered in England and Wales under company number 14527587. Registered office: Verity House, 6 Canal Wharf, Leeds, LS11 5BQ.