ALM(Asset Liability Management )
ALM – Key Takeaways
ALM offers an optimized portfolio based on the client’s liabilities.
ALM incorporates the client’s objectives – such as large future acquisitions – in the portfolio optimization process, thereby providing a better match between investment returns and the investor’s objectives.
Deeper knowledge of your client’s situation and about his/her objectives (goals).
Strategic Asset Allocation is more relevant, taking into account his/her future expenses (no surprises).
Bespoke portfolio
ALM – The What and the Why
What is an ALM?
ALM is a dynamic asset allocation optimization process that integrates short, medium and long-term liabilities of a client. It provides an optimized portfolio based on client’s liabilities. The optimization takes into account commitments over time (recurring, occasional and one-off expenses and income) as well as any specific individual constraints.
ALM incorporates the client’s objectives – such as large future acquisitions – in the portfolio optimization process, thereby providing a better match between investment returns and the investor’s objectives.
Why is it a differentiating proposal?
Most banks and asset managers provide portfolio profiles based on a single period mean-variance portfolio optimization without taking into account liabilities (future expenses) of the client. Therefore, this methodology suffers from several limitations and cannot meet the needs of sophisticated investors.
