[Verse 1] Pension funds calculate their funded status daily Assets minus liabilities, keeping members safely When surplus risk emerges from the market's wild swings Liability-driven investing stabilizes these things Target-date funds follow glide paths through the years Shifting bonds and equities as retirement nears [Chorus] Institutions manage billions with precision and care Pension funds and endowments, insurance everywhere ALM and surplus management, capital to spare Match your assets to your liabilities with flair [Verse 2] Endowments choose their spending rules to last forever Simple percentage, rolling average, or geometric lever Perpetuity assumption keeps the money flowing Intergenerational equity, future generations knowing Foundations balance current needs with tomorrow's call Distribution policies determine how much for all [Chorus] Institutions manage billions with precision and care Pension funds and endowments, insurance everywhere ALM and surplus management, capital to spare Match your assets to your liabilities with flair [Bridge] Insurance companies hedge their product guarantees Regulatory capital protects policyholders' fees Sovereign wealth funds serve three different masters Stabilization, savings, development disasters [Verse 3] Banks conduct ALM to manage interest rate exposure Duration matching prevents unwanted disclosure Capital requirements set by regulators tight Basel frameworks guide them through the regulatory night Surplus management optimizes shareholder returns While risk management ensures the institution never burns [Chorus] Institutions manage billions with precision and care Pension funds and endowments, insurance everywhere ALM and surplus management, capital to spare Match your assets to your liabilities with flair [Outro] From sovereign funds to pension schemes so grand Portfolio management helps institutions stand
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