SEI Quick Poll Finds Adoption Of LDI Strategies Has More Than Doubled With Netherlands Leading The Way

UK Results Reveal Pension Funds Moving Away From Absolute Returns to Pension Funding as Benchmark for Success

LONDON, Nov. 18, 2009 – The 3rd annual LDI Global Quick Poll from SEI (NASDAQ: SEIC), the leading global provider of Fiduciary Management, released today, shows that more than half (54 percent) of the organisations surveyed¹ globally have implemented Liability Driven Investment strategies in their pension fund portfolios. The Dutch market leads the way with 94 percent of respondents implementing an LDI approach, whilst in the UK, 50 percent of respondents state that they are utilising LDI. These figures reflect a dramatic increase in the popularity of LDI over the last three years both from a global average perspective and in the UK and Netherlands. Globally, usage has increased from 20 percent (UK: 19 percent, Netherlands: 43 percent) in 2007 and 37 percent (UK: 42 percent, Netherlands: 61 percent) in 2008.

The poll examined how attitudes towards LDI have changed over the past three years, particularly in light of the market conditions during this period. A clear majority (global average: 70 percent, UK: 50 percent, Netherlands: 88 percent) said volatility in the past year had increased the value of LDI. More than one-third (global average: 37 percent, UK: 37 percent, Netherlands: 44 percent) of those polled who were already using LDI said they had implemented the tactic within the past twelve months.

Charles Marandu, Director of European Advice for SEI’s Institutional Group said:

"The market turmoil of late 2008 and early 2009 caused a significant rise in DB pension deficits because return oriented assets generally fell in value and interest rates hit new lows. As a result, many pension funds have increased their interest in and adoption of LDI strategies. It is our belief that the Netherlands has led the charge in this area because of a combination of legislation and progressive thinking by those responsible for running pension funds. The high take-up of Fiduciary Management in the Netherlands has clearly led to a better appreciation by Dutch pension scheme decision makers of the potential value of a liability driven approach. It can be argued that by comparing credit crunch experiences with schemes in the Netherlands, many UK pension scheme decision makers are coming to the same conclusion – that improved governance can lead to better outcomes."

The poll shows that pension plans globally have shifted away from using absolute returns as a benchmark. In 2007, 28 percent of respondents globally ranked an absolute return benchmark as the primary measure for success. This dropped to 20 percent in 2008, and then fell again in 2009 to 15 percent.

Mr Marandu also commented on UK responses to the issue of benchmarking. He said:

"In the UK the trend away from organisations thinking about pension assets in a vacuum mirrors the rest of the world. Few respondents (12 percent) look to absolute return as the primary benchmark for their success; 62 percent said that improving funding level was the key benchmark for success, higher than any other country and markedly different from 2008 where only 23 percent stated that this was their benchmark. This reflects the growing demand from pension funds for pensions solutions that focus on managing the funding level of the scheme."

The term LDI has been saddled with numerous interpretations. The SEI poll asked respondents to choose the definition which corresponded most closely with their ambitions. In the UK well over a third (36 percent) defined LDI as a portfolio designed to be risk managed with respect to liabilities. This reflects the greater focus on risk in today’s environment and a clear understanding that LDI is an approach to pension fund management rather than an off the shelf product.

¹ The global poll, conducted by SEI’s Pension Management Research Panel, was completed by 150 pension executives who oversee pensions ranging from US $30 million to more than US $5 billion in assets. Participants were from four countries - Canada, Netherlands, United Kingdom, and United States.

A complete summary of the poll is available by emailing cdeutsch@seic.com.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company’s innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of September 30, 2009, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $383 billion in mutual fund and pooled assets and manages $156 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. For more information, visit www.seic.com.

About SEI’s Institutional Group

SEI’s Institutional Group is the first and largest global provider of Fiduciary Management services. The company began offering these services in 1992 and currently has over 500 fiduciary management clients worldwide. In 2004, SEI became the first to offer a fiduciary management solution that integrates assets, liabilities and overall organisational finances by incorporating risk management, investment advice, implementation, oversight, trust/custody, and a unique modelling process. The company provides these services to pension fund, healthcare, charity and endowment clients worldwide. For more information visit http://www.seic.com/enUK/institutional-investors.htm.

About Fiduciary Management

Fiduciary Management is defined as a pension management solution which focuses on achieving the long term goals of a pension fund within a defined risk management framework by providing both day-to-day investment management and advisory services. The approach enhances pension governance and decision-making by delegating the risk management and investment advice, implementation and oversight of the pension fund to one provider. In practice this means that trustees can delegate the day-to-day management of the pension fund to one provider, the Fiduciary Manager, who is accountable to the trustees for the performance of the fund.

Benefits of working with a Fiduciary Manager who uses a manager of managers approach:

• One point of contact rather than multiple advisers and asset managers
• Time savings allowing increased focus by trustees on strategic issues
• Potential cost savings by working with one provider on an asset based fee
• Single focus on overall goals of the pension scheme by combining advice and implementation
• The comfort of a co-fiduciary who is accountable for manager selection decisions
• Diversification amongst managers within asset classes
• Continuous manager research, monitoring and replacement

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