The AI-based technology will use Cardano’s database of historical covenant assessments to provide automated assessments and reports for schemes to analyse their covenant strength.

The tool has been launched to assist schemes where high-level covenant analysis may be more appropriate, including schemes with assets less than £50m and simple covenant structures.

Discover – which will allow Cardano to enhance its covenant services for schemes of all sizes – can also conduct AI led reviews of the underlying employers of sectionalised or non-associated multi-employer schemes including Local Government Pension Schemes.

Cardano Advisory director Felix Mantz said: “Discover is a further step towards modernisation within the pensions industry, as we continue to harness new technology to build tools and solutions for schemes. With our wealth of data, we can increasingly harness this through AI to bring innovative risk management solutions to trustees, employers, and members in a cost-effective manner.

“Traditional covenant reviews involve in-depth analysis from a team of dedicated covenant professionals and can be out of reach for smaller schemes due to costs. Given the importance of covenant to member outcomes, and with an increased focus from The Pensions Regulator on covenant, we believe that Discover will make external covenant analysis more accessible and affordable to smaller, simple, or sectionalised schemes.”

Cardano Advisory has launched a new artificial intelligence (AI) based technology to evolve the way in which covenant assessments are provided to smaller schemes or scheme sections.

The tool, named Discover, aims to use Cardano’s database of historical covenant assessments, alongside AI technology, to provide automated assessments and reports for schemes to assess their covenant strength.

Cardano stated that Discover has been designed for schemes where high-level covenant analysis may be more appropriate, including schemes that have less than £50m in assets and simple covenant structures.

The tool can also conduct AI-led reviews of the underlying employers of sectionalised or non-associated multi-employer schemes, including the Local Government Pension Scheme.

It aims to provide an employer covenant rating based on quantitative and qualitative factors, examining the “main drivers” underlying the rating, benchmarking rating metrics, and providing corresponding recommendations.

Discover can also be used to support triennial valuations, scheme return submissions, ongoing monitoring and risk assessments, according to Cardano, as well as explore the covenant impact of ‘what-if’ scenarios, for example an improvement in the sponsor’s trading or an increase in its debt.

“Discover is a further step towards modernisation within the pensions industry, as we continue to harness new technology to build tools and solutions for schemes,” commented Cardano Advisory director, Felix Mantz.

“With our wealth of data, we can increasingly harness this through AI to bring innovative risk management solutions to trustees, employers, and members in a cost-effective manner.

“Traditional covenant reviews involve in-depth analysis from a team of dedicated covenant professionals and can be out of reach for smaller schemes due to costs.

“Given the importance of covenant to member outcomes, and with an increased focus from The Pensions Regulator on covenant, we believe that Discover will make external covenant analysis more accessible and affordable to smaller, simple, or sectionalised schemes.”

The Pensions Management Institute (PMI) has appointed Cardano Advisory as its newest Insight Partner, offering specialist support on employer covenant to PMI members.

The partnership will focus on the key considerations facing pension scheme trustees in the covenant space such as funding positions, the Pension Schemes Act, risk transfer, ESG, stressed schemes, restructuring, litigation and transactions.
 
The PMI will work alongside Cardano Advisory to deliver webinars, interviews, panel discussions, research and case studies designed to increase understanding of employer covenant and other relevant topics in the industry providing a big picture thinking approach.
 
The partnership will allow PMI members to access Cardano Advisory’s insight, independent mindset and experience on covenant through its multiple distribution channels, including its monthly magazine ‘Pensions Aspects’, email newsletters, PMI TV Bitesize, thought provoking webinars and its dedicated Insight Partners web area.
 
The PMI’s Insight Partnerships are developed exclusively with organisations considered to be thought leaders and experts in the industry, to support innovation on significant issues and add value through the delivery of expert knowledge.
 
Gareth Tancred, CEO of the Pensions Management Institute, says: “This exciting partnership will enable our members to access a range of high-quality guidance on the often complex issues related to covenant. We aim to provide our members access to education that encompasses the entire pensions industry and are thrilled to incorporate Cardano Advisory’s covenant insight into our offering.”
 
Matthew Harrison, Managing Director of Cardano Advisory, says: “We’re looking forward to sharing our knowledge and experience with PMI members and are delighted to become its covenant specialist. Covenant is critical in the management of pension schemes, with the potential to both enhance the value of investments and protect against sources of risk. In the current environment, it is essential that trustees maximise covenant support to ensure that members’ benefits are protected. Through working with the PMI, we hope to ensure covenant plays an important part in long term journey planning.”

 The partnership will focus on the key considerations facing pension scheme trustees in the covenant space such as funding positions, the Pension Schemes Act, risk transfer, ESG, stressed schemes, restructuring, litigation and transactions.

 The PMI will work alongside Cardano Advisory to deliver webinars, interviews, panel discussions, research and case studies designed to increase understanding of employer covenant and other relevant topics in the industry providing a big picture thinking approach.

 The partnership will allow PMI members to access Cardano Advisory’s insight, independent mindset and experience on covenant through its multiple distribution channels, including its monthly magazine ‘Pensions Aspects’, email newsletters, PMI TV Bitesize, thought provoking webinars and its dedicated Insight Partners web area.

 The PMI’s Insight Partnerships are developed exclusively with organisations considered to be thought leaders and experts in the industry, to support innovation on significant issues and add value through the delivery of expert knowledge.

 Gareth Tancred, CEO of the Pensions Management Institute, comments: “This exciting partnership will enable our members to access a range of high-quality guidance on the often complex issues related to covenant. We aim to provide our members access to education that encompasses the entire pensions industry and are thrilled to incorporate Cardano Advisory’s covenant insight into our offering.”

 Matthew Harrison, Managing Director of Cardano Advisory, comments: “We’re looking forward to sharing our knowledge and experience with PMI members and are delighted to become its covenant specialist. Covenant is critical in the management of pension schemes, with the potential to both enhance the value of investments and protect against sources of risk. In the current environment, it is essential that trustees maximise covenant support to ensure that members’ benefits are protected. Through working with the PMI, we hope to ensure covenant plays an important part in long term journey planning.”