IRELAND- Aon consulting has received regulatory approval for its new Dublin-based open ended investment company, Aon Investment Company. Registered in Dublin, the OEIC will operate from London and provide an integrated service combining investment consulting advice with a manager of managers approach.
Increased client demand for more than straightforward manager selection advice encouraged Aon to establish the new product which will be run by Aon Asset Management.
Says Tommy Garvey, head of institutional business at Aon AM: “the pensions industry in the UK is undergoing massive change at the moment, putting enormous pressure on already strained trustees. We should soon be able to offer UK trustees a complete investment solution.”
Clients will initially be offered a range of specialist funds comprising UK, European, US, Japanese and Asia Pacific ex-Japan equity funds, and a sterling corporate bond fund, but there are plans to extend the range and incorporate alternatives such as private equity or property. Aon is expecting the new company to raise up to £1bn (e1.6bn) by the end of the year.
Return targets, after fees, are 1.5% above the domestic benchmark for the equity funds and 0.75% above the benchmark for the corporate bond fund. Each fund will have two or more mangers that will be selected by Aon’s client advisory research team and under continual review.
Ireland’s central bank authorised the OEIC last month but Aon will have to see out the FSA’s statutory two-month waiting period before launching the product in the UK. Garvey confirmed that the FSA foresees no problems with the OEIC and that the first UK pension fund client will on board at the end of September.
Suggestions that the independent nature of Aon’s investment advice may be compromised are dismissed by Garvey. “We would not have established the vehicle unless we though it was appropriate for our clients. Pooling assets is a more efficient way of conducting business.”
Last month Chris Erwin, investment principal at Aon in London, said: “trustees are quite able to decide for themselves what they want. To suggest that there is a conflict of interest is frankly insulting their intelligence. It’s entirely up to them.”