Alternative Investments for Pension Funds Training Course

Participants can distinguish major alternative strategies, structures and sources of pension-fund risk.

• Private equity, private debt, real estate and infrastructure return drivers
• Hedge fund strategies, factor exposures and liquidity characteristics
• Natural resources and real assets as inflation-sensitive exposures
• Closed-end, evergreen and listed vehicles compared for pension investors
• Limited partnership structures, side letters and co-investment arrangements
• General partner, fund administrator and depositary operating responsibilities

Participants can set a strategic alternatives allocation using pension-fund objectives and portfolio constraints.

• Mean-variance analysis limitations for illiquid asset allocation decisions
• Scenario analysis linking asset returns, liabilities and funding levels
• Risk budgets allocated across growth, defensive and illiquid exposures
• Strategic allocation ranges expressed through policy portfolio limits
• Correlation assumptions adjusted for appraisal smoothing and stale pricing
• Investment beliefs used to justify active private-market exposures

Participants can build a commitment pacing approach that maintains required pension-fund liquidity.

• J-curve mechanics from management fees, capital calls and distributions
• Vintage-year diversification within a long-term private-market programme
• Commitment pacing model built from target NAV and distribution assumptions
• Capital-call forecasts using drawdown rates and deployment schedules
• Distribution projections adjusted for exit markets and refinancing conditions
• Overcommitment ratios calibrated against liquid asset reserves

Participants can assess private equity funds, direct investments and co-investment opportunities for pension portfolios.

• Buyout, growth equity, venture capital and secondary strategy distinctions
• Value creation plans assessed through revenue, margins and multiple expansion
• Internal rate of return and multiple calculations interpreted carefully
• Public market equivalent methods comparing private and listed returns
• Key-person clauses, investment periods and recycling provisions reviewed
• Co-investment opportunities assessed for selection bias and concentration

Participants can evaluate private debt opportunities, credit protections and portfolio risk exposures.

• Direct lending, mezzanine, distressed debt and asset-backed lending compared
• Yield decomposition across base rates, spreads, fees and losses
• Credit underwriting based on cash flow, collateral and covenants
• Debt service coverage ratio and loan-to-value tests interpreted
• Covenant packages, amendments and lender-control rights evaluated
• Default, recovery and refinancing scenarios tested within portfolio limits

Participants can assess real estate strategies against income, inflation and liquidity objectives.

• Core, core-plus, value-add and opportunistic property strategies compared
• Net operating income, cap rates and property valuation drivers
• Lease duration, tenant concentration and vacancy risk assessed
• Debt structures, refinancing exposure and interest-rate sensitivity analysed
• Open-ended property fund redemption terms and dilution mechanisms
• Real estate benchmark selection using property-type and regional exposures

Participants can assess infrastructure and real-asset investments using cash-flow, regulatory and inflation analysis.

• Core infrastructure, contracted assets and merchant-risk projects distinguished
• Regulated asset bases and concession agreements assessed for revenue certainty
• Inflation linkage tested through tariffs, contracts and operating costs
• Construction risk, completion guarantees and sponsor support evaluated
• Energy transition assets assessed for policy, technology and curtailment risks
• Natural resource returns separated into commodity, operating and financing components

Participants can assess hedge fund strategies, downside controls and implementation risks for pension portfolios.

• Equity long-short, macro, relative-value and multi-strategy approaches compared
• Factor analysis separating manager skill from systematic market exposures
• Gross exposure, net exposure and beta-adjusted risk interpreted
• Redemption gates, side pockets and suspension provisions reviewed
• Drawdown analysis applied to crisis periods and liquidity events
• Operational due diligence covering valuation, custody and trade controls

Participants can conduct a structured due-diligence assessment and manager-selection recommendation.

• Due-diligence plan covering strategy, team, process and operations
• Track-record attribution separating realised, unrealised and inherited investments
• Reference checks structured around decision quality and conduct
• Team stability, succession planning and key-person dependencies assessed
• Conflicts registers reviewed for allocation, fees and affiliated transactions
• Manager scoring matrix documented with evidence and decision rationale

Participants can analyse fund documentation and negotiate terms that improve alignment with pension-fund interests.

• Limited partnership agreement provisions affecting investor rights and obligations
• Management fee bases compared across commitment and invested-capital periods
• Carried interest waterfalls modelled using European and American structures
• Preferred returns, catch-ups and clawbacks tested through cash-flow examples
• Expense allocations examined for broken deals, monitoring and transaction costs
• Most-favoured-nation clauses and side-letter protections assessed

Participants can construct an alternatives portfolio with explicit diversification and concentration controls.

• Portfolio exposures mapped by strategy, geography, sector and vintage
• Look-through analysis identifying common sponsors, issuers and counterparties
• Concentration limits set for managers, funds and underlying assets
• Pacing decisions coordinated with existing NAV and unfunded commitments
• Rebalancing constraints considered under illiquid secondary-market conditions
• Secondary sales assessed for pricing discounts and portfolio benefits

Participants can test pension-fund liquidity under adverse market and private-market cash-flow conditions.

• Liquidity ladder constructed from benefit payments, collateral and capital calls
• Baseline cash-flow forecast integrating contributions, income and distributions
• Stressed distributions modelled under delayed exits and weak markets
• Capital-call acceleration tested during public-market drawdowns
• Collateral calls incorporated for derivatives and liability-hedging programmes
• Contingency actions ranked by cost, timing and governance approval

Participants can evaluate alternative asset valuations and measure returns using appropriate methods.

• IFRS 13 fair value hierarchy applied to private asset valuations
• Discounted cash flow, market multiples and recent transactions compared
• Valuation committees, independent reviews and challenge processes examined
• Time-weighted return and money-weighted return measures distinguished
• Internal rate of return limitations addressed through cash-flow timing analysis
• Benchmarking methods using public market equivalents and peer universes

Participants can specify reporting requirements and identify data-quality issues in alternatives portfolios.

• NAV statements reconciled to capital accounts and cash movements
• ILPA Reporting Template fields used for fee and expense analysis
• Look-through holdings data prepared for risk and exposure reporting
• Valuation-date lags identified within consolidated portfolio reports
• Performance reports checked for benchmark, methodology and attribution consistency
• Data governance roles assigned across managers, custodians and administrators

Participants can incorporate material sustainability factors and stewardship requirements into alternatives decisions.

• Material ESG factors identified by strategy, asset and investment horizon
• Climate scenario analysis applied to infrastructure and real estate assets
• Responsible investment clauses incorporated within manager due-diligence questionnaires
• Stewardship expectations defined for general partners and co-investment partners
• Impact claims tested against indicators, baselines and reporting boundaries
• Controversy escalation procedures established for serious portfolio-company incidents

Participants can design decision rights and controls for a pension-fund alternatives programme.

• Statement of investment principles aligned with alternatives policy limits
• Trustee, committee and executive responsibilities defined through delegation matrices
• Investment committee papers structured around recommendation, risks and decisions
• Conflicts-of-interest procedures applied to advisers and external managers
• Investment approval thresholds linked to commitment size and complexity
• Exception reporting triggers defined for performance, liquidity and compliance

Participants can establish a monitoring framework that supports timely challenge and escalation.

• Quarterly monitoring dashboard built from returns, NAV and cash-flow indicators
• Manager scorecards updated for performance, team, strategy and operations
• Key risk indicators set for liquidity, valuation and concentration
• Annual review agenda covering mandate fit, fees and portfolio developments
• Watchlist criteria established for underperformance, drift and governance concerns
• Escalation routes defined for remediation, redemption and legal action

Participants can prepare clear committee materials for alternative investment decisions and oversight.

• Decision papers distinguish facts, assumptions, judgements and recommendations
• Investment cases summarise strategy fit, risks, fees and liquidity
• Sensitivity analysis presented through clear charts and decision thresholds
• Committee questions anticipated using evidence from due-diligence findings
• Recommendation language states approval conditions and delegated authorities
• Meeting minutes record challenge, decisions and follow-up actions

Participants can build, review and present a complete alternatives investment proposal for a pension fund investment committee.

• Pension scheme objectives translated into alternatives allocation requirements
• Target allocation supported by return, diversification and liquidity analysis
• Commitment pacing model completed with baseline and stress assumptions
• Manager selection recommendation supported by documented due-diligence evidence
• Governance, monitoring and escalation arrangements defined for approval
• Investment committee proposal presented, challenged and revised against feedback