Legal & General Investment Management on Wednesday launched what the firm called the next generation of pooled liability-driven investing funds for institutions.
The LGIM Matching Plus platform consists of a range of 24 “maturity buckets” that can be used to match pension liabilities more precisely by allowing investors to control interest rates and inflation hedging, and the level of leverage, said Michelle Darracott, head of strategic development in the firm's solutions group.
In addition, separate “asset buckets” are used to tailor the risk/return profile of the particular pension fund.
“We're transforming what was available only to larger clients into a more flexible, transparent and cost-effective solution for small- to medium-size pension funds,” Ms. Darracott said. The pooled funds are available in the U.K. and U.S., but with different options to reflect market variations. LGIM already manages about £5 billion ($8.2 billion) in LDI pooled funds. The firm also manages about another £40 billion in segregated derivatives-based LDI strategies.
Investors in the Matching Plus platform can also set up “triggers” to shift assets around as the funding position changes and monitor their own investments against the appropriate liabilities profile, Ms. Darracott added. The open-architecture platform also allows investors to maintain existing money managers for the underlying assets within their portfolios.