F&C Asset Management : facilitates £500m Western United Group Pension Scheme buyout in ‘a first of a kind’ transition for pooled LDI investors

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F&C minimises costs and mitigates out of market risk with its innovative LDI Transition

Fund

In an industry first for pooled LDI, F&C's innovative and unique LDI Transition fund allowed the scheme to transition out of their pooled LDI holding whilst mitigating out of market risk and saving hundreds of thousands of pounds in transaction costs. In addition, the fund allowed the Western United Group Pension Scheme to deliver a pre-specified portfolio of bonds to the insurer, which was beneficial to the price stability of the buy-out.
The scheme had also been invested in F&C's Equity-Linked Bond Funds since 2009. These funds provide exposure to both bond and equity markets in a simple and capital efficient structure. The strong returns from these funds helped the scheme achieve its goal of full funding.
The Transition LDI Fund is available to schemes investing in F&C's LDI fund range, and was launched just over a year ago. The fund is designed to allow pooled LDI clients to reduce materially the transaction costs and out of market risk that are traditionally associated with switching from a gilt portfolio into a leveraged LDI fund. This is the first time the Transition LDI Fund has been used to achieve the same benefits when moving out of an LDI fund.

"This transition on behalf of the Western United Group Pension Scheme changes that. It means we can offer all our clients a clear and cost effective exit route when the time comes to move to buy-out. We are particularly proud to remain at the forefront of innovation in providing the full range of liability risk management solutions."
Ben Fowler, Group Head of Reward & HR Development at Western United Group Pension Scheme, said: "Having invested carefully for many years we are delighted to have reached full solvency and been able to conduct a full buy-out of the scheme's liabilities. F&C has been a significant contributor to the scheme's investment success, both in growing the assets and managing the liability risks through their Dynamic LDI Funds.
"We were very impressed with the short timeframes F&C were able to work to in order to accommodate the buy-out, and the innovative LDI Transition Fund solution they put together. This

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helped us manage the market risks during the transition and resulted in substantial cost savings for the scheme."
The Western United Group pension scheme announced the buyout to its members by Rothesay
Life on Thursday 21st August.

F&C is focused exclusively on managing money for its clients. It manages assets for a combination of insurance clients, institutional investors, intermediaries and private individuals. F&C invests across all major asset classes - equities, fixed income and property - and has specialist expertise in asset allocation, alternative investments, liability-driven investments, multi-manager, private equity funds and responsible investing. The F&C Group includes F&C REIT, a global real estate asset manager.
F&C has a strong footprint in the U.K. and the rest of Europe with assets under management of approximately £83 billion as at 30 June 2014. F&C has a rich heritage that dates back almost 150 years and can be traced back to the founding in 1868 of the Foreign & Colonial Investment Trust.
F&C is part of Bank of Montreal (BMO) Global Asset Management, a global investment manager with more than US$269 billion in assets under management as of 31 December 2013. BMO Global Asset Management is a part of BMO Financial Group (NYSE:BMO), a fully diversified financial services organisation with US$531 billion total assets and more than 45,000 employees as of April
30, 2014.

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Richard Janes
Director, Communications Richard.janes@fandc.comTel: +44 (0) 20 7011 4298

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