Liability Investing Model and Perpetual Time Horizon

CFA Level III
#1

Could you anyone advise why we cannot use liability-driven investing model when we have
equity tilt (fund wants to hold a large percentage of assets in equities) and perpetual time horizon of the fund?

#2

Do you have any ideas on why that might be the case?

#3

No

#4

Think about it a little and get back to us.

You’ll learn this material a lot better if you try to formulate answers, even if they’re initially incorrect.

#5

I will think about it.

#6

Thanks!

#7

Let me know if my reasoning is correct In LDI we cannot assume long time horizon as once liabilities are fully funded then equity allocation will change. Also LDI are not perpetual.