EUROPE- Barclays Global Investors (BGI) has launched 16 new pooled liability driven investment (LDI) funds aimed at UK and European pension funds that want to outperform their liabilities.

The new funds, which are domiciled in Dublin, are a follow up to a series of 20 UK domiciled liability-matching funds launched in March, which are currently worth £2bn (€2.89bn).

They funds were launched to meet a perceived UK pension fund demand for liability matching through the use of inflation and interest rate swaps, said Hugh Cutler, BGI’s managing director.

Of the 16 new funds, 10 are euro-denominated and are aimed at the Dutch pension market which, Cutler said, has shown interest in LDI products.

Four of the six remaining funds are sterling denominated while the remaining two are sterling and euro denominated. The new pooled funds target pension funds that want to outperform their liabilities, Cutler told IPE.

“It is more risky in that the volatility of the fund will be higher,” he said, adding the pooled structure was likely to attract large funds for their low-cost and straightforwardness.

Cutler said that BGI has enlisted eight “of the big names” in investment banking as counter-party for its pooled funds, but he declined to identify them.

BGI has predicted that by the end of 2005 up to 20 UK and continental European clients, mainly pension funds, will have subscribed to the new LDI pooled funds.

“Over the next two-to-three years we are expecting this kind of product to gain acceptance and gain momentum,” Cutler said.

BGI’s seven-strong LDI solutions team, headed by Tarik Ben-Saud, is likely to recruit a new member, Cutler added.

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