Aaron Punwani, an LCP partner, denied any conflict of interest between taking fees for managing assets against the lower remuneration available for offering advice on manager selection: “We will only suggest LCP Simplify to a client if we think it is suitable option. Our position is that we don’t mind which fund they go for.”
LCP has commissioned sister company Investment Solutions to select and combine the underlying asset managers, which are chosen from a universe of managers put together by LCP researchers.
The other asset managers in the product are GMO, Baillie Gifford, Bernstein, Hermes, Gartmore and, for property, Morley.
LCP Simplify is aimed at smaller defined benefit pension schemes. It is designed to precisely match short-term cash flow requirements and long-term investment needs, switching the client’s investment between asset classes as the pension fund matures.
“We have developed the strategy based on holding low-risk investments to meet nearer term payments and for the latter part of the payments a pension fund will have to make higher risk investments,” said Mr Punwani.
Investment Solutions, a multi-manager outfit founded seven years ago in South Africa, will run 35 funds for LCP. Senior investment manager at Investment Solutions, Richard Dingham, said the funds managers were selected based on investment style and, for active managers, more qualitative factors, such as the personalities picking the stocks and the company’s CEO.
RM
