The first pension fund pooling vehicles will be operational in the next few weeks, although all are, as yet, restricted to UK investors and UK investments.

Schroders, State Street Global Advisors (SSGA) and Mercury Asset Management (MAM) have confirmed that they are setting up funds, with Schro-ders believing that they are the first to gain final Inland Revenue approval.

The prospects for the set up of an international PFPV have also increased with Switzerland joining the UK and the Channel Islands in giving its approval. For the moment, though, activity is UK focused.

A Schroders spokesman said: We are hoping to make them available to investors in the next month or so and believe that we are the first people to gain Revenue approval for the product."

MAM and SSGA, who are providing more details of their plans, have contrasting approaches, with MAM stripping existing funds of non-pension clients, while SSgA is setting up "new funds with new assets."

MAM plans to offer two bond funds while State Street plans two bond funds and an equity fund.

Nigel Wightman, chief operating officer at SSGA in London explained the thinking behind the product: "We are looking at PFPVs as part of a family of funds that will be sold to UK institutional investors. The PFPVs will focus on UK assets only," he said.

Following initial clearance and consultation with trustees, the trust deeds are now awaiting initial Revenue clearance, with Wightman estimating the launch in four to six weeks.

He continued: "We are focusing on the UK initially because the tax treatment of PFPVs is not clear." All the funds will be passively managed.

MAM is examining many of its unauthorised unit trusts as candidates for conversion but for the moment for reasons of simplicity is focusing on two fixed interest funds.

A spokesman said: "We have got a range funds - for the most part authorised unit trusts with one or two offshore funds. We are looking at each of these individually to see whether they will be suitable for conversion in due course."

He pointed out that initially the company would offer UK fixed interest funds, which are free from withholding tax concerns, and only to UK investors until the various international tax arrangements were worked out.

John Lappin"