The ability for an organisation to be successful in the Bulk Annuities market is dependent on its ability to price it’s offerings competitively.  Effective pricing is enabled by having an ability to invest in alternative assets that have cash flow profiles suitable for matching adjustment eligibility whilst delivering higher yields than could be obtained by investing in more traditional assets.  This requirement for an alternative asset capability puts pressure on an organisation’s operating model, requiring origination, risk and operations groups to work closely together to ensure new asset types can be assessed and invested in quickly whilst handling the greater complexity in capturing, recording, valuing and reporting these new assets.

Holley Holland has market practitioner experience that can help clients to develop an effective end-to-end operating model that enables new business take-on whilst ensuring:

  • an effective control environment is maintained;
  • risk is understood and managed effectively; and
  • latest regulations, such as those relating to valuation uncertainty, are complied with.

Operating Model

The challenges presented by investing in alternative assets have compelled organisations to re-evaluate their investments operating model.  As the drive for yield has continued this has led to an acceptance of greater complexity in alternative asset investments, including more structured and securitised products.

An effective end-to-end investments operating model needs to evolve to meet these continuing demands.  Holley Holland has deep expertise in operations and valuations for alternative assets and can help with key aspects of organisation design such as:

  • Design and implementation of end-to-end work flow and controls
  • Systems landscape and specific technology tool selection and implementation
  • Use of Third Party Administrators (TPA)
  • Skills gap identification and remediation (recruitment and training)
  • Short to medium term interim leadership and management

Asset Onboarding

In a competitive environment for sourcing alternative assets with suitable yield and duration profiles it is important to be able to react quickly to emerging market opportunities, both from a pricing and execution perspective.  Operations and support functions will need to have flexibility to:

  • Evaluate operational capability to capture, value and report new asset types
  • Manage the balance between delivering speed to market and long term capability solutions
  • Maintain effective governance without slowing speed of execution
  • Prioritise investment and effort for delivering appropriate long term capability

Holley Holland can help with our experience of developing frameworks for on-boarding new asset types, delivering and maintaining effective tactical processes and controls, and implementation of culture and system change to deliver lasting strategic capability.


Investment Operations models have evolved to cope with greater volumes of alternative asset investments, but further work to support activities specific to Bulk Annuities has also been required.   These additional activities are irrespective of whether the Bulk transaction is a buy out or buy in and include:

  • Initial asset transfer of either i) in-specie of existing assets supporting the annuity book, or ii) the equivalent cash value
  • On-going in-specie transfers between Matching Adjustment and Non-Matching Adjustment portfolios (MAP and non-MAP)
  • Creation of custodian link for TPAs if assets are to be held within a ring-fenced external custodian account
  • Additional reporting requirements for assets held in ring fenced custody, including possible licensing requirements in respect of market data required
  • Aggregated reporting requirements to cover client sub funds where necessary (typically on buy-in transactions).

Holley Holland has experience of managing operations activities to ensure short term transaction objectives can be met whilst also implementing improved processes and controls, including improved interaction with TPAs, that deliver long term strategic capability to support on-going business activity.


Alternative assets are mostly illiquid, are not readily traded in the market and therefore cannot be valued using market quotes.  Bespoke capability is required to determine an appropriate fair value for these alternative assets, whilst ensuring compliance with current regulations for assessing and reporting valuation uncertainty.  Structured and securitised products also present operational challenges in capturing and processing trade data (trade features and cash flows) that may require specific tools to manage effectively.

Holley Holland has extensive practical experience of developing valuation systems and controls for alternative assets and can help with:

  • Development of fair value policies for alternative assets;
  • Design and implementation of effective governance, such as Fair Value Committee and appropriate management reporting;
  • Design, build and implementation of valuation models for alternative assets; and
  • Development and implementation of valuation uncertainty policies and procedures.

Holley Holland also has technology capability that can accelerate an organisation’s speed to deliver tools to support cash flow management and valuations for alternative assets, including securitised structures.

How Holley Holland Can Help

Holley Holland’s Bulk Investment Services offering can help organisations with embedding capabilities to manage alternative assets, including designing and implementing an operating model that is fit-for-purpose across a range of activities such as asset onboarding, operations and valuations.