EUROPE - F&C is now marketing its pooled liability driven investment (LDI) solution, which aims to optimise European pension funds' exposure to return generating assets.

The solution, enabling pension schemes to hedge against the risk of future interest rate and inflation movements, is aimed at reducing pension funds' deficits by optimising their exposure to return generating assets, said F&C in a statement.

"The F&C LDI funds enable both large and small pension schemes to hedge the interest rate and inflation risks within a pension scheme," said Richard Watts, the firm's head of asset liability management.

The fund uses derivative contracts within a passive pooled fund and "unbundles the ‘beta' provision of the hedge from the generation of ‘alpha' through active portfolio management".

Watts added: "The twin aspects of a pure beta hedge and effective use of gearing means that schemes can free up a higher portion of their assets to invest in return-generating portfolios using managers of their choice and thereby seek a rapid reduction in funding deficits."

There are six series of 10 pools, stretching from 2007 until 2056, a spokesman told IPE.

F&C launched its LDI fund with existing Dutch clients at the beginning of last year, but is now actively looking to market it to institutional investors in the UK, Ireland and in continental Europe.

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