UK - The £2bn Babcock International pension fund has hired Insight Investment as liability-driven investment (LDI) manager following a beauty parade.

Insight will provide hedging and growth strategies across four out of the five Babcock final salary schemes; the remaining fund, which is part of a railway legacy, is not included in the LDI approach.

Andrew Birkett, pensions manager at Babcock, told IPE: "Insight will be looking at hedging options on interest rates, but they were only just appointed at last investment sub-committee meeting so it's early days.

"We will have another meeting later this month and the fund manager will be working with Mercer and the committee to put together an appropriate strategy."

Babcock's appointment of Insight is an important step in the engineering company's adoption of an LDI approach, which has taken nearly 12 months so far.

In June 2009, the firm switched to a single over-arching governance structure for the four schemes, including the creation of an investment sub-committee. It also hired Mercer as sole investment consultant.

The scheme then entered into an £800m longevity swap with Credit Suisse covering the firm's current book of pensioners.