Advisory services

There’s a constant tension between the sponsor of the pension scheme (who would naturally prefer to rely on investment markets to do most of the work) and the trustees, who would often like to see the sponsor putting some cash into the scheme. The question is: what does the sponsor do with its cash? Put it into the pension fund? Pay a dividend to shareholders? Or invest in the business? Clearly, you don’t want to kill the golden goose by taking too much money out of the business. At the same time, you don’t want the sponsor company to pay out too much in dividends or to borrow too much from the banks. So it’s a constant balancing act.

One of the challenges is helping people to understand and navigate some of these long-term risks and to acknowledge that taking action now is the right thing to do – and the smart thing to do. It’s all about planning for uncertainties. After all, it’s seductive to think that things will probably remain as they are, but major changes – like a pandemic – can kick in at any moment. It’s rather like maintaining your house: you can leave the roof unfixed and your windows unpainted, and they may well be fine for a year or two. But do you really want to wait for the rain to come in during the next big storm?

Secondly, many of our colleagues in the advisory market are selling themselves and their advisory products. That generally means selling stochastic financial modelling, where different scenarios are run through complicated mathematical models on how investment markets might perform and how your pension fund might react to this. One of the ways in which we stand out from our competitors is in that we don’t really believe that we as humans can model the complexity of the world. Any model is a gross simplification.

Here at Cardano Advisory, we have the humility to acknowledge that we don’t understand everything. We recognise that there’s very little that we can actually control. And therefore, what we need to do is to consider different scenarios, do contingency planning, and have a diverse group of people thinking different thoughts and challenging the status quo. We haven’t built an Excel spreadsheet that we claim is going to solve every problem and that we can sell you off the shelf. Of course, we do analysis, but it’s about analysing real risks that we perceive at a particular point in time.

We believe in following a process rather than selling an off-the-shelf product. Following that process in partnership with us will lead to better outcomes. The reason why we have a market-leading reputation in our field is precisely because we’ve achieved extremely good outcomes for our clients. People come to us because of that best-in-class covenant capability and our understanding of how to manage capital allocation to support long-term risks such as pension scheme funding and net zero transition. We’ve achieved some really phenomenal outcomes for our clients, particularly in high-pressure, high-stakes transaction scenarios.

Working closely with trustees, sponsors, investors and other stakeholders across a wide range of sectors, we provide innovative solutions to deliver safer financial futures.

• We build deep relationships: we ‘keep in touch’, and understand your history and where you are going.
• Covenant advice is the tool through which we achieve that deep understanding of our clients. So we’re able to help when it really matters.
• We have a multi-disciplinary skill set and value all forms of diversity, including cognitive diversity, as critical to delivering holistic solutions that work.
• We are proud to work with schemes and sponsors of all sizes, sometimes supporting household names and high-profile transactions.
• We are the advisory arm of a leading pensions and sustainability investment management group, allowing us to offer our clients a unique perspective and set of resources.