Barclays Global Investors in London has grown its series of pooled investment vehicles for pension funds to include fully- and partially-funded interest rate and credit derivative-based funds. BGI launched its first pooled funds in March, following similar moves at other asset management firms, including State Street Global Advisors (DW, 11/5). The primary aim of the funds is to match pension funds' interest rate or inflation liabilities, by pooling investment in cash and rates swaps with different maturities. BGI has also now launched a geared credit fund, which invests in cash and credit-default swaps to offer pension funds access to a growth fund alongside the liability-matching rates swap funds.
Hugh Cutler, managing director at BGI, said the fund manager has ISDA agreements with eight different counterparties to allow the fund manager to compare swap prices, which is then passed on to the pension fund as the end investor. Cutler added BGI chooses counterparties which offer consistently good pricing and are flexible in the type of collateral they receive. BGI manages over GBP2 billion (USD3.5 billion) in pooled funds.
