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JP Morgan sees virtual pension pooling by Q4

UK – JP Morgan says it could have a UK pension fund client in a virtual pooling arrangement by the fourth quarter of this year.

Ann Doherty, regional head of European client management at JP Morgan Worldwide Securities, told IPE that pooling was attracting an “enormous amount of interest” from clients, although few are doing it yet.

“Pooling is fraught with legal, regulatory and tax problems, which go across jurisdictions. Despite these problems, the savings that can be made are driving interest in it.”

She said she was not in a position to go into more details yet, as clients were still finalising their plans.

Virtual pooling, which is allowed in Ireland and Luxembourg, enables assets with the same mandate to be combined, while they are legally and beneficially owned by the pension funds participants in the asset pool.

Earlier this month Denis Stainier of Mercer's Paris said multinational companies were already using asset pooling for defined benefit pension schemes.

Several supplier companies are touting the benefits of pooling, though few names of client companies have been revealed.

In May Northern Trust said it had developed a product that allows multinational companies to “commingle” US pension assets with non-US assets.

In February this year, Kredietbank’s Luxembourg arm launched a €1.1bn pension pooling vehicle for the Suez-Tractebel group.

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