Fresh. Focused. Flexible.

Hudson Pilot has been built around Michael Peskin’s long career in pension advisory and investment banking. HP is an independent investment firm that has no propriety investment products and no financial relationships with third parties that could impede its ability to offer clients best-in-class solutions. HP was structured specifically to provide unbiased, cutting-edge investment solutions that create value through thought leadership, strategic partnerships, and disciplined risk management.

Hudson Pilot’s diverse client base includes large corporations (in a variety of sectors), public pension plans, insurance companies, endowments, and foundations.

Special Projects (Click on topic headings to expand)

  • Capital Market Assumptions
    Similar to investment consultants, historical return data is utilized to support the assumptions. However, understanding how correlations and returns evolve with certain regimes and how regimes will most likely change is paramount. Consequently, Hudson Pilot employs a macro-economic regime switching discipline to develop capital market assumptions for the investment decision process.
  • Capital Structure & Enterprise Risk Analysis
    Within this context, Hudson Pilot focuses on plan affordability (controlling contribution costs) and the allocation of risk. HP strategies seek to keep costs low and not correlated with the sponsoring entity. Costs that are correlated with the corporation commonly result from more traditional pension allocations. Such allocations have a high potential of producing a “quadruple whammy”: large required pension contributions coming at a time when the corporation’s stock price is down, borrowing cost is high, and risk management is expensive.
  • Investment Committee and Board Education
    Pension risk management is only a small piece of management’s responsibilities. Hudson Pilot offers a unique combination of pension, actuarial, corporate finance, and capital markets experience. HP’s management are proven thought leaders in LDI, ALM within a corporate finance framework, and dynamic pension investment strategies. In addition to access to its team, HP offers informative resources such as white papers and tailored quantitative analysis.
  • Investment Policy Development
    Through a capital structure and enterprise risk analysis, Hudson Pilot works with clients to understand each of the key stakeholders perspectives; to identify investment policy changes that immediately increase value and/or improve probabilities of success; and to document an actionable / executable strategy within the investment policy statement (IPS). The IPS will define asset classes and investment advisory roles, asset class allocation targets, investment guidelines and restrictions, rebalancing guidelines, performance benchmarks, and the roles of the plan’s fiduciaries.
  • M&A and Financing Advisory (Pension)
    Pension accounting continues to be misleading; pension contribution requirements continue to be complex; and the Pension Benefit Guarantee Corporation (PBGC) continues to have the ability to complicate transactions. HP’s team has over 27 years of experience with Morgan Stanley. Furthermore, Michael Peskin‘s framework served as the largest corporate pension financing in United States history.

Retained Services

  • Reporting
    • Risk Analysis
      Risk reporting is used to keep management informed of the evolving situation. This reporting helps explain what drove returns and helps remind decision makers why certain levels of risk and types of risks are taken.
    • Performance Measurement
      Asset returns are commonly misinterpreted. Hudson Pilot continuously evaluates investment performance relative to appropriate benchmarks. For pension plans, liability benchmarks serve as the crux of the performance evaluation process because asset class-specific benchmarks and the performance of peers should be secondary concerns.
  • Sub-advisor / Alpha-Strategy Selection
    • No Proprietary Products
      Hudson Pilot does NOT offer proprietary products which can bias the allocation / manager selection process and make pricing less transparent.
    • No Financial Relationships with Sub-advisors
      HP has NO financial relationships with 3rd-parties. The vast majority of investment advisors and consultants implement their advice through “manager-of-manager” platforms which require financial relationships with each sub-advisor.
    • Open Architecture
      Hudson Pilot is able to work with existing sub-advisors and/or the directed trustee.
    • Preferred Strategic Partners
      HP has established strategic partnerships with traditional and non-traditional sub-advisors and financial institutions to assure it can continuously provide best in-class solutions with competitive pricing.
  • Investment Policy Implementation
    • Investment Management Agreements (IMAs)
      Negotiate and enter into IMA on behalf of the client with each sub-advisor.
    • Approved Signer with Directed Trustee
      Establish ability to transact on behalf of the client through the trustee agreement and trustee-specific requirements.
    • Portfolio Performance & Sub-advisor Monitoring
      Track and verify daily account balances, applicable benchmarks, and liability measures. Initiate transactions in compliance with the investment policy statement (IPS).
    • Client Communications
      Customize communication process to align with the level of involvement each client prefers to have in the investment process. Identify appropriate frequency and level of detail to be reported.
  • Tactical Asset Allocation (TAA)
    • Macroeconomics
      Risk arises as a natural consequence of a multitude of people making decisions about their futures and a reasonable probability distribution can be found to describe the possible outcomes. The current economy is unusual and marked by a high level of uncertainty that does not allow for the determination of a probability distribution of outcomes with any confidence. In fact, key politicians drive central bank decisions that can have a profound effect. The required asset allocation for adding value differs between macroeconomic environments. In particular, periods of uncertainty require hedging and a more tactical and dynamic approach to investing, an approach that must be informed with geo-political views.
    • Geo-Political Views
      Historical returns provide little insight into the future “long-term” returns of risky assets. Rapidly changing demographics, technology, economies, and the inter-relationships among them are creating a more complex world. Understanding the impact of geo-politics on asset classes and strategies is a critical component to HP’s investment process.
    • Investment Thesis
      Identifying the likelihood of future regime changes helps avoid investment strategies with improbable or impossible success; strategies continually financed by passive approaches. Structuring portfolios tailored to probably future regimes dramatically improves the distribution of potential future outcomes.
    • Approval Process
      Hudson Pilot recognizes the importance of identifying the level of discretion with which each client is comfortable. Consequently, the investment policy statement (IPS) documents the approval process required for tactical decision, and any approved allocation changes.
    • Portfolio Positioning
      Hudson Pilot communicates decisions to sub-advisor(s) and the directed trustee to transfer necessary capital among sub-advisors.

Overview and Mission

Hudson Pilot is dedicated to the development and implementation of innovative solutions to the financial management of pension plans and endowments.

 

Our mission is to assist clients in setting and managing goals through enterprise-wide focused analysis and solutions.