For F&C this mandate – which follows the January takeover by Resolution Life of Swiss Life’s UK insurance operation – represents an important step towards increasing its market share in this sector. Today the firm has £124 assets under management, of which £78.6bn comes from the insurance industry.
Robert Matthews, head of UK insurance business at F&C Asset Management, said: “The trend is towards more and more insurers outsourcing their fund management capabilities and this is a market that will grow significantly over the next five years. It is also an area where we are keen to capture significant market share.”
F&C’s European insurance clients include Friends Provident, Royal & SunAlliance, Achmea and Friends First.
The key to successfully managing insurance assets, said Mr Matthews, is extensive experience dealing with core asset classes. “It requires significant experience in terms of fixed income and also in fund management in terms of asset liability modelling and use of derivatives.”
Resolution Life has not given a specific brief in terms of the investment strategy for the portfolio but Mr Matthews said F&C would be “working closely with them on the transition of the assets and making proposals in terms of how they should be invested”.
He added: “It is a relatively new phenomenon for insurance companies to outsource investment management capabilities. We are at the beginning of this process rather than at the end.”
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