UK - Merrill Lynch Investment Managers (MLIM) is set to launch a multi-manager package for smaller UK defined benefit pension schemes. It will be the first time that MLIM has offered products of external managers to institutional clients.
Subject to final contracts, the Diamond Portfolio Management Service will provide externally managed US and Pacific Basin/Japanese equity investments from Los Angeles-based Analytic Investors and Singapore’s APS Asset Management.
MLIM itself will provide the remainder of investments in equities, bonds, property and private equity in the hybrid between multi-manager and multi-asset funds.
Andrew Dyson, MLIM head of institutional marketing, said: “We used long-term performance criteria. If over three-years our internal pieces were performing then we kept them internally. But if the performance number in three years had been under the benchmark, then we’d outsource them.”
The firm has decided to launch the product, available from the end of May, after identifying weaknesses in current multi-manager products.
Dyson added: “The weaknesses we have seen in multi-manager offerings are an inability to tailor to liabilities particularly where you use a bond portfolio to do that with different types of bonds and different durations. Post-Myners and post-FRS17, this is very important.”
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