BlackRock Inc. is tapping Pensions & Investments' asset allocation data to construct a new strategy aimed at providing greater liquidity for institutional portfolios without sacrificing the potential returns offered by higher-risk assets.
Under a multiyear licensing agreement, BlackRock will use P&I's data on the median asset allocation of the 1,000 largest U.S. pension funds — which the newspaper has calculated on the strength of its annual survey of top retirement plans since 1974 — to build its liquidity portfolio strategy.
Terms of the deal were not disclosed.
Using BlackRock's iShares exchange-traded funds to match those median asset allocations, the strategy offers investors who were squeezed when large swaths of their portfolios froze in 2008 a way to expand their liquid holdings without the hit to performance that larger allocations to cash would impose.
“We are pleased that BlackRock has created an innovative way to use P&I's asset allocation data to help reduce cash drag and better manage pension funds' liquidity needs by using ETFs to maintain asset class exposures,” says Christopher J. Battaglia, vice president and publisher of Pensions & Investments.
The liquid policy strategy is being made available for both public and corporate defined benefit pension plan portfolios.