Scottish Widows Investment Partnership has started to approach small pension schemes with a set of liability-driven investment funds, as the trend of matching a retirement fund's performance targets and investments to its liabilities rather than a benchmark becomes more popular in the UK.

After working on the project for over a year, Swip has approached potential investors, typically pension funds with at least £5m (€6.6m) in assets, with five interest rate and five inflation rate funds. By investing in a specific combination of the funds, the investors can hedge against interest rate and inflation risks as appropriate, which is effectively a liability-driven investment strategy.