UK – The co-chief executive of Barclays Global Investors, Andrew Skirton, says he sees a move in the “tens of billions” towards liability matching.
Skirton said in an interview that the liability management of pension funds was “an important and persistent trend”.
“We expect to see more of that demand,” he said, adding that in the UK such a shift could involve assets “in the tens of billions” of pounds.
The move would come as corporate finance directors and treasury departments get more involved in pensions as a balance sheet management issue – “over and above the trustees”.
Skirton, global co-head of BGI with Blake Grossman, added that BGI now manages six billion dollars in hedge fund assets – and that BGI is now the biggest manager of hedge assets for institutional investors.
Skirton’s comments come as the division said its assets under management at the end of 2003 have risen 29% to 598 billion pounds (882 billion euros) – with a 67 billion-pound inflow of new assets.
Assets under management comprise 410 billion pounds (69%) in indexed assets, 125 billion pounds (21%) in active assets and 63 billion pounds (10%) in managed cash. Exchange traded funds totalled 69 billion dollars from 35 billion dollars a year before.
Operating profit at the division, excluding goodwill, was up 73% to 192 million pounds.
Net fees and commissions increased 23% to 662 million pounds – “reflecting good income generation across a diverse range of products, distribution channels and geographies”.
It said the increase was largely driven by growth of investment management fees, resulting from strong net new sales, growth in the sales of higher margin products, good investment performance and the recovery in equity markets.
BGI’s parent Barclays reported pre-tax profits of 3.8 billion pounds, up from 3.2 billion in 2002.