Credit Suisse to diversify LDI into euros
[10:55 CEST 06/06] EUROPE - Credit Suisse is expanding its liability driven investment offering into the European pensions sector with the launch of a Euro Diversified Growth LDI fund later this summer.
Although few details are being revealed at this stage, it is thought Credit Suisse Asset Management could release a Euro-denominated fund this summer to give European pension funds a packaged solution for investing their future liabilities over a set period of years.
Current terms of the UK-based CS Diversified Growth LDI fund - offered as part of the Virtuoso fund range - means occupational pension funds can invest in one of four share classes, two of which offer inflation protection and two offering interest rate protection, over fixed periods of 40 and 20 years, and receive a net return of LIBOR+400bp.
Terry O'Malley, head of UK institutional distribution at CSAM, said the success of the UK LDI product since its launch in April 2007 - so far raising around £100m (€150m) - means the company now believes it could extend its range into both Europe and the US.
"Smaller clients are looking for packaged solutions of liability matching and they can get this through one relationship with Credit Suisse, offering everything from the product wrapper and fiduciary responsibility to portfolio construction," said O'Malley.
"At this stage, the fund is worth £100m since its launch, but the pipeline business is already double that amount," he added.
The Luxembourg-listed Diversified Growth (UK) LDI fund accompanies the Target Return Fund, which has set investment periods for the four swap classes of 10 or 20 years and returns LIBOR+250bp gross of fees.