UK – The £6bn (€7bn) pension fund for London’s transport authority has committed to a new emerging market (EM) fund managed by Legal & General Investment Management (LGIM).
Announcing the launch of the LGIM Russell Developed Large Cap EM GeoExposure Index Fund, the manager said the Transport for London Pension Fund (TfLPF) had committed £150m and was its first investor.
LGIM said the fund would target companies deriving a “material proportion” of their revenue from EM countries, which it hoped would reduce volatility compared with traditional EM investment.
Simon Midgen, head of index funds strategy at LGIM, said: “This is the first fund we have developed that tracks a Russell index and expands our range of alternatively weighted index funds.
“We remain committed to developing funds and products to meet our clients’ needs and are pleased to have Transport for London’s Pension Fund as seed investors.”
According to the TfLPF’s most recent annual report, LGIM already managed more than half of its assets in liability matching and index-tracking strategies.
It did not disclose any specific EM mandates, instead investing in global equities through JO Hambro, IronBridge Capital Management and Taube Hodson Stonex.
It also had exposure to Pacific equities, managed by Nomura, as well as a North American equity mandate overseen by Burgundy Asset Management.