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| PAIF funds are a popular investment option for institutional and individual investors who are seeking exposure to UK commercial property with a tax-efficient structure. However, like all investment funds, PAIFs are subject to market risk and investors should carefully consider the risks and benefits before investing. | | PAIF funds are a popular investment option for institutional and individual investors who are seeking exposure to UK commercial property with a tax-efficient structure. However, like all investment funds, PAIFs are subject to market risk and investors should carefully consider the risks and benefits before investing. |
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| == What's Liability Driven Investment? ==
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| Liability Driven Investment (LDI) is an investment strategy that aims to align the assets of a pension plan or other institutional investor with the liabilities or future payment obligations of that plan. The goal of LDI is to reduce the risk of shortfalls in funding by investing in assets that are expected to perform similarly to the liabilities of the plan, and thus provide a more predictable and stable stream of income to meet future obligations.
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| In an LDI strategy, the investor will typically invest in fixed income securities such as bonds or other interest-bearing instruments with durations that match or closely approximate the duration of the plan's liabilities. By doing so, the investor can reduce the impact of interest rate changes on the plan's funding levels, and provide a more stable source of income to meet future payment obligations. In some cases, LDI may also involve using derivatives such as interest rate swaps or options to hedge against interest rate or other risks that could impact the plan's funding levels.
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| LDI is commonly used by institutional investors such as pension funds, insurance companies, and other organizations that have long-term payment obligations and need to manage their assets and liabilities in a coordinated manner to achieve their financial goals.
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