Developments in the Irish pension fund market, the role of private debt, and the sometimes difficult conversations about risk

Pardon the Interruption

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It was great to see so many Irish mallowstreet members at our Educational Dublin Roadshow this week.
 
We took a deep dive into the world of private debt, learning about the asset class and understanding the role it can play in a pension fund’s portfolio. 

Nicole Downer (Managing Director at MV Credit, a Natixis Affiliate) explained that we were closer to the end of the cycle than the beginning and showed how ESG is integrated across her team’s investment process – and has been for years (mainly as a risk mitigation tool).
 
The audience asked Nicole a number of key questions, including:
 
  • What types of companies do they lend to?
  • Which industries do they work in and, crucially, avoid?
  • How do they ensure they get their money back and are not just continually ‘refinancing’ or ‘rolling over’ debt?
  • What do you do when a company is in trouble?

Nicole shared stories of her experience working alongside companies MV Credit had lent money to during the Global Financial Crisis in 2008. It sounded like a challenging time, but MV Credit still managed to generate positive returns for its investors.

Conversations around risk are vital

 
Oliver Kelly (Head of Investment Consulting at LCP Ireland) then picked up the discussion, focusing on how pension funds should be evaluating and thinking about risk in both DB and DC schemes. 

For him, there are a number of vital conversations trustee boards must have with themselves and their employers to ensure everyone is clear on the pension fund’s objectives. While the conversations can be difficult, they are essential to ensure a pension fund remains on track to reach their end game. 

Oliver also made the point that pension funds should be challenging their advisers, pushing them for the information, tools and resources to have a more informed discussion and make better decisions.

A broad conversation followed, as attendees shared their stories, pain points, key fears, and what they were doing to navigate the current environment.
 
It is clear that the regulatory landscape is changing, with a push for more professionalisation and consolidation in the Irish market. What remains unclear is the timing.
 
For those who were with us this week, what did you learn and what questions are still top of mind?
 
And for our Irish members, what is your endgame – self-sufficiency or buyout? And how are you planning to get there?

Lisa Buckley
Kevin Donaghy
Anne Keogh
Robert Woods