Investor's Notebook: Hooked on investment-linked bonds
People have been known to hide under the table in Melrose Arch when these two scary-looking men walk past. There is a tall, pale fellow and his stocky and pugnacious-looking sidekick. Shaun Levitan and Costa Economou certainly stand out in a fund management industry in which so many are George Clooney wannabes. As actuaries they have also turned their business, Colourfield Liability Solutions, into a genuinely out-of-the-ordinary affair. It has a very clear philosophy and Economou sent me its sacred texts, the selected works of Prof Robert Merton, from the Massachusetts Institute of Technology.The cornerstone belief is that there is a crisis arising from the shift from traditional final salary (or defined-benefit) pensions to defined-contribution, or money-purchase plans. Colourfield’s mission is to bring the focus back from return on investment to retirement income.You might think that a bigger asset pool will buy a bigger income, but it is much more complex than that, or so it see...
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