LGIM announces the launch of its delegated solutions service and Buy-out Aware Funds
13 October 2014
Legal & General Investment Management (LGIM) is pleased to announce the launch of its delegated solutions service. Managing pension fund assets has become increasingly complex and dynamic, in terms of strategy design and how that evolves with changes in the scheme's funding level and market conditions. Against this backdrop, delegated solutions services have become more popular among UK defined benefit pension funds. LGIM's entry into this area is in response to this growing demand and also reflects feedback received from its UK pension scheme clients.
Aaron Meder, Head of LGIM's Solutions Group, commented: "This move illustrates the evolution in our business from a provider of market leading investment building blocks to a comprehensive solutions provider, where we take more responsibility for achieving our clients' overall investment objectives. Our clients are looking to delegate an increasing amount of decision making to LGIM and we believe we are well placed to deliver delegated solutions that will improve funding level outcomes and save schemes money. We have the full range of building blocks at our disposal and a proven track record of bringing these together to meet our clients' needs."
As part of its delegated solutions service, LGIM is launching a suite of Buy-out Aware funds for pension schemes looking to move to buy-out. (This occurs when an insurer takes over responsibility from the trustees and sponsor of a pension fund for meeting the pension liabilities.)
Schemes invest in a bespoke blend of LGIM corporate bond and liability matching funds, and LGIM leverages its expertise across LDI, Active Fixed Income, Index, and managing insurance assets generally. The funds have three principal objectives:
- to close the gap between a pension scheme's current assets and the cost of buy-out
- to better match any changes in the buy-out cost
- and to lower the transaction cost at the point of buy-out, and for a buy-out with L&G retirement, at a default transaction cost of zero.
Aaron Meder said: "We believe we are the only investment manager in the UK who can credibly provide the full range of building blocks and solutions for clients looking to diversify their assets, match their liabilities and ultimately move to buy-out with an insurer within the same group."
Kerrigan Procter, Managing Director, Legal & General Retirement, said: "The Buy-out Aware Funds are core to our philosophy of working across Legal & General to achieve the best outcome for our clients. Consequently, I am delighted to confirm that LGIM clients executing a buy-out with L&G Retirement will be able to transfer their holdings in the LGIM Buy-out Aware Funds to us at a default transaction cost of zero, thus reducing the net cost of the buy-out."
Notes to editorsFor further information, please contact:
Name: Steve Leach
Title: PR Manager
Tel: 020 3124 2096
LEGAL & GENERAL INVESTMENT MANAGEMENT:
Legal & General Investment Management (LGIM) is one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £465 billion in assets for more than 3,000 clients*. Throughout the past 40 years we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across a full spectrum of asset classes including equities, fixed income, commercial property and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
*As at 30 June 2014