L&G launches fund for DC pension schemes

UK financial services group Legal & General has announced the launch of a new fund to provide Defined Contribution (DC) pension schemes with a blend of global and UK exposure to real estate while managing volatility and liquidity.

The hybrid fund is a joint initiative between Legal & General Property (LGP) and Legal & General Investment Management (LGIM). The launch of the new fund comes hard on the heels of CB Richard Ellis Investors' announcement earlier this week that it is introducing a UK property fund targeting DC investors. Like L&G, CBREI aims to capitalise on the increasing shift in the pensions industry from Defined Benefited (DB) to DC investment.

While CBREI plans to build up a EUR 1.1 bn diversified commercial portfolio in the UK, LGP is following a different route. The Hybrid Property Fund will invest in LGP's £1.1 bn UK balanced fund (the Managed Property Fund) and globally through LGIM's Global REITS Index Tracker Fund. The default position split is 70-30, respectively.

The hybrid fund is open to a number of other DC schemes and L&G said it has already been selected by a major Life platform to provide its clients with global real estate exposure.