UK/EUROPE - Gartmore Investment Management is looking to issue specialised bonds which will provide smaller pension schemes with a greater diversity of investment.
The firm is currently holding talks with investment banks to help them develop and underwrite the collateralised debt obligation products (CDOs), which invest in junk bonds, but can themselves be classed as investment grade bonds.
Gartmore expects the CDOs to achieve ratings of between triple-A and double-B, as the bonds will be substantially over-collateralised.
Gartmore head of fixed income structured products David Hynes said: “We think that CDOs is an interesting market. If it is done properly, it adds a lot of value and brings a lot of additional capabilities to investors who can’t normally access specialist skill areas such as investment grade or high yield bonds.
“It is a good way of repackaging products to bring to those investors, and provide them with some form of diversification.”
However, Hynes added that as yet no firm timetable is in place for launching the bond and that the firm is looking for “a few” key investors to provide seed capital.
He also revealed that the firm will be teaming up with a “large” American fund manager to offer schemes European money market funds.
The two firms are currently in the final stages of negotiations, and expect to launch the funds in February.
Gartmore currently runs - on behalf of pension fund clients - £68.9m in US money market funds, £41.6m in euro funds, and £526m in UK money market funds.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.