Liquidity Management For Investment Professionals

Liquidity ManagementSecurity, liquidity and return potential for clients

Active cash investment solutions, harnessing the expertise of one of the UK’s leading investment managers.

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Liquidity Management

Legal & General Investment Management (LGIM) is one

of Europe’s largest asset managers and a major global

investor, with total assets of £853 billion*. We work

with a wide range of global clients, including corporate

investors, sovereign wealth funds, fund distributors,

retail investors and pension schemes.

Throughout the past 40 years we have built our business

through understanding what matters most to our clients

and transforming this insight into valuable, accessible

investment products and solutions.

We provide investment expertise across the full spectrum

of asset classes including cash, fixed income, equities

and commercial property. Our capabilities range from

liquidity management to liability-based investment

solutions.

LGIM has been managing cash assets for over 40 years

and is one of the UK’s leading providers of liquidity

solutions. Throughout this time we have proven our

ability to navigate a wide variety of market environments,

including several periods of elevated volatility and

multiple interest rate cycles.

Liquidity capabilities at Legal & General Investment Management

Liquidity capability milestones

LGIM founded 1970

Money Markets

since 1972

1980 1985 1990 1995 2000 2005 2010 2015

Cash Fund

(VNAV)

Black

Monday

UK leaves

ERM

Asian financial

crisis

Global

financial

crisis

European

Sovereign

debt crisis

Liquidity (CNAV)

Financial market events

*As at 30 June 2016, including derivative positions and advisory assets.

Liquidity (VNAV)

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Liquidity Management

An award-winning manager

We put our clients at the heart of everything we do, and

this drives our approach from client service to product

development and investment management. The success

of this philosophy has been regularly recognised with

numerous industry awards.

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Liquidity Management

Through our Sterling, Sterling Plus and US Dollar

Liquidity Funds, we offer investors an actively managed

alternative to short-term bank deposits, which meet the

Institutional Money Market Funds Association (IMMFA)

Code of Practice. We also offer clients a range of bespoke

liquidity solutions.

Our Liquidity Funds aim to provide security, liquidity

and a competitive return.

SECURITY

• The LGIM Liquidity Funds’ primary objective is capital

preservation

• Funds are well diversified across a number of high-

quality issuers and money market instruments

• All cash fund holdings are researched comprehensively

on a global basis by LGIM’s credit teams

• The LGIM Sterling Liquidity and LGIM US Dollar

Liquidity Funds carry a Standard & Poor’s AAAm

rating, a Moody’s Aaa-mf rating, and a Fitch AAAmmf

rating

LIQUIDITY

• Daily dealing with no-lock in periods

• Daily stress testing to assess our ability to meet large

redemptions

• LGIM employs a liquidity policy which requires the

funds to hold a significant proportion of assets that

mature within a week

Providing security, liquidity and return potential

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Liquidity Management

COMPETITIVE RETURN POTENTIAL

• The LGIM Sterling Liquidity Fund has consistently

been in the first or second quartile each calendar

quarter since launch*

• As one of the largest investors in the market place,

LGIM can obtain competitive market pricing through

scale – a benefit passed on to our clients

COMPETITIVE FEES

• Transparent fee structure

• No fees applied by the fund for subscriptions or

redemptions

*Source: LGIM, as at 30 August 2016, Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up. Captial is at risk.

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Liquidity Management

Ret

urn

Duration / credit risk

• Variable NAV (VNAV)

• 3m LIBOR +150/350

• Variable NAV (VNAV)

• 3m LIBOR +20

• T+2 liquidity

• Constant NAV (CNAV)

• 7 day LIBID +10

• T+0 liquidity

• Client-specific investment guidelines

• Liquidity requirements based on clients’ cashflow projections

• A dedicated cash management team, portfolio management and relationship manager

Flexible bespoke solutions

Liquidity Funds

Liquidity Plus Funds

Absolute Return Bond

Funds

The LGIM cash fund range at a glance

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Liquidity Management

A key differentiator is our macro-driven thematic

investment process. We focus on the long-term outlook

and seek to identify market turning points, helping us to

target attractive performance across the market cycle.

• Client focused: We are committed

to delivering solutions that help

achieve your ultimate investment

objectives

• Emphasis on risk management:

We have a strong risk management

culture, encompassing credit,

interest rate and liquidity risk

• Cash management expertise:

Liquidity management forms

a strategic part of LGIM’s asset

management capability. We

dedicate significant resources to

liquidity management and fixed

income. Over 70 investment

professionals feed into our global

fixed income investment process

and together manage in excess of

£126 billion1. LGIM manages one

of the largest sterling liquidity

funds2 and offers tailored liquidity

investment solutions to a wide

range of international clients

WHY LGIM FOR LIQUIDITY MANAGEMENT?

MACRO

Macro themes act as an anchor for

portfolio construction

CREDIT

Fundamental research focused on

the evolution of credit quality

RISK MANAGEMENT

Analysis and controls to ensure

consistency with portfolio

objectives

1 As at 30 June 2016.

2 LGIM Sterling Liquidity Fund, Fund size £27,360m, Valuation date 31 August 2016.

The active LGIM investment approach

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Liquidity Management

CONTACT US FOR MORE INFORMATION

Ian Lloyd, Head of Liquidity Distribution

+44 (0)20 3124 4360

ian.lloyd@lgim.com

Simon Allison, Liquidity Distribution Manager

+44 (0)20 3124 3584

simon.allison@lgim.com

Legal & General Investment Management,

One Coleman Street, London, EC2R 5AA.

Key considerations and risks

Investing in financial markets exposes investors to risk. Investing in a broad range of fixed income instruments meansadverse moves in interest rates, poor performance by the companies issuing the bonds and exchange rate fluctuations mayall lead to losses. Derivatives may also be used for efficient portfolio management as well as investment purposes. Theunderlying investments will not exactly match changes in the value of a pension scheme’s liabilities and schemes will needto be able to generate sufficient return in order to meet liability cashflows. Further details (including relevant risk factors andfund specific risks) are available from your usual LGIM contact.

Important Notice

This document is produced by Legal & General Investment Management Limited. It is for the exclusive use of the recipientand is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of orlocated in any locality, state, country or jurisdiction where distribution, publication, availability or use of this document wouldbe contrary to law or regulation. This document is provided for information purposes only and does not constitute an offer ora recommendation to buy or sell securities or financial instruments.

The information in this document does not take into account the specific or future investment objectives, financial or taxsituation or particular needs of any recipient. Tax treatment of the subscription, holding and redemption of shares in the funddepends on individual circumstances and may be subject to change. Before making any investment decision, investors arerecommended to assess whether this investment is suitable for them in light of their financial knowledge and experience,investment objectives and financial or tax situation and to obtain specific advice from an investment professional.

Any investment involves risks, especially with regard to fluctuations in value and return. No guarantee can be given thatthe fund will achieve its objective, or reach or outperform the performance of its benchmark, if any. Investments in foreigncurrencies involve the additional risk that the foreign currency might lose value against the investor’s reference currency.Historical performance indications and financial market scenarios are no guarantee for current or future performance.Performance indications do not consider charges levied at subscription and/or redemption.

Legal & General Investment Management is authorised and regulated by the Financial Conduct Authority. To ensure quality ofservice and for the protection of all parties, telephone calls may be recorded.

© 2016 Legal & General Investment Management. All rights reserved. No part of this document may be reproduced in wholeor in part without the prior written consent of Legal & General Investment Management.

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