Marc van Heel, Pimco’s director of business development said: “We have a couple of liability-driven investments in the Netherlands and this would be the third one. In order to outperform the given benchmark, which closely matches the liabilities, the client also gives us the opportunity to leverage our global network and to invest mainly in eurobonds, but also outside this market in order to capture all the alpha opportunities.”
One of the advantages of this strategy compared to swap overlays is that it offers more flexibility to alter the benchmark to suit liability streams. “ In most cases we have a yearly reset of the benchmark.”
On the other hand, and following the increasing interest among UK investors in higher return fixed income strategies, the Devonport Royal Dockyard Pension Trustees fund awarded Pimco a £105m (€154m) brief that will be benchmarked against a combination of fixed-linked and corporate bonds and will seek excess returns of 1.5 per cent, relative to the benchmark.
Pimco, part of the Allianz Global Investors group manages in excess of €23bn for European clients. Global assets under management represent over €350bn.
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