LGIM launches delegated solutions service

As part of its delegated solutions service, LGIM is launching a suite of Buy-out Aware funds for pension schemes looking to move to buy-out.

Aaron Meder, Head of LGIM’s Solutions Group, commented:

“This move illustrates the evolution in our business from a provider of market leading investment building blocks to a comprehensive solutions provider, where we take more responsibility for achieving our clients’ overall investment objectives. Our clients are looking to delegate an increasing amount of decision making to LGIM and we believe we are well placed to deliver delegated solutions that will improve funding level outcomes and save schemes money. We have the full range of building blocks at our disposal and a proven track record of bringing these together to meet our clients’ needs.”

Schemes invest in a bespoke blend of LGIM corporate bond and liability matching funds, and LGIM leverages its expertise across LDI, Active Fixed Income, Index, and managing insurance assets generally. The funds have three principal objectives:

- to close the gap between a pension scheme’s current assets and the cost of buy-out
- to better match any changes in the buy-out cost
- and to lower the transaction cost at the point of buy-out, and for a buy-out with L&G retirement, at a default transaction cost of zero.

Aaron Meder said:

“We believe we are the only investment manager in the UK who can credibly provide the full range of building blocks and solutions for clients looking to diversify their assets, match their liabilities and ultimately move to buy-out with an insurer within the same group.”

Kerrigan Procter, Managing Director, Legal & General Retirement, said:

“The Buy-out Aware Funds are core to our philosophy of working across Legal & General to achieve the best outcome for our clients. Consequently, I am delighted to confirm that LGIM clients executing a buy-out with L&G Retirement will be able to transfer their holdings in the LGIM Buy-out Aware Funds to us at a default transaction cost of zero, thus reducing the net cost of the buy-out.”