GLOBAL – Barclays Global Investors has launched 20 pooled liability driven investment funds with more than £1bn (€1.45bn) in assets.
The asset manager said the move aimed to bring LDI into the “mainstream”. The BGI Liability Solutions Funds could be used by pension funds to address interest rate and inflation risks so there is a closer link between assets and liabilities.
There are seven funds extending for around 50 years “each aiming to provide cash flows which reflect fixed payments between investment and fund expiry”.
There are also seven 30-year funds to provide cash flows reflecting retail price inflation between investment and fund expiry.
Six funds extend 30 years and aim to provide cash flows that reflect limited price inflation.
Schemes will be able to create bespoke portfolios to provide cashflows in line with their liabilities, BGI said in a statement.
“To date, LDI has been the preserve of the largest schemes,” said BGI managing director Hugh Cutler. “BGI’s innovative approach will bring LDI into the mainstream, allowing smaller from the latest evolution in pension fund management thinking.”