Legal & General Investment Management (LGIM) has launched a ‘delegated solutions’ service which includes a suite of funds to help investors towards buyout.
LGIM said the move was in response to a growing demand and feedback from its clients and the increasing popularity of delegated investment services among UK pension funds.
LGIM head of the Solutions Group Aaron Meder added: “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 the service, LGIM is also launching a suite of ‘buyout aware’ funds which see schemes looking to move to buyout invest in a bespoke blend of LGIM corporate bond and liability-matching funds.
The funds have three principal objectives: to close the gap between a pension scheme’s current assets and the cost of buyout; to better match any changes in the buyout cost; and to lower the transaction cost at the point of buyout at a default transaction cost of zero.
Legal & General Retirement managing director Kerrigan Procter said: “The Buyout 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 buyout with L&G Retirement will be able to transfer their holdings in the LGIM Buyout Aware funds to us at a default transaction cost of zero, thus reducing the net cost of the buyout.”
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