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L&G wins outsource deal for Scottish Friendly&#39s life fund

Scottish Friendly says the majority of its £355m life fund is to be outsourced to Legal & General, with around £230m in tracker funds linked to the all-share index, the all-stocks gilts index and several foreign equity indices.

The remainder of the life fund is invested in a number of specialist investment funds aimed at adding value to the core index-tracking strategy. These include existing holdings in several property funds and new investments into specialist equity funds run by fund manager Colin McLean&#39s SVM and Edinburgh Partners, recently launched by Sandy Nairn.

Scottish Friendly&#39s Oeic funds, currently valued at £15m, are also to be managed by SVM.

Chief executive Bob Thomson says a strategic review of its operations earlier this year concluded that the outsourcing of its fund management, with a significant proportion inves-ted in tracker funds, offered the best long-term prospects for policyholders.

Scottish Friendly&#39s management says it was attrac-ted to the big volume of tracker funds managed by L&G which it believes offers less chance of deviation from index performance and reduces the risk of underperformance.

L&G marketing director Michael Hayden says: “I am delighted to welcome Scottish Friendly as a client. We look forward to a long lasting and successful relationship with them.”

SVM fund manager Colin McLean says: “My priority is to deliver the best poss-ible investment returns to Scottish Friendly and its customers who have inves-ted in these funds directly and through Isas.”

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