Insurers and asset managers set to tag-team target date funds

New opportunities for insurers and asset managers are on the horizon as they seek a way to put a guaranteed wrapper around target date funds, according to an insurance company executive. Speaking on the panel “The New Retirement Reality” at LIMRA International's annual conference in New York yesterday, James K. Cornell, chief marketing officer at Prudential Retirement, discussed the interest he has seen among asset managers, as well as the new products the firm has created, including Income Flex, which uses an underlying investment of enhanced index funds and an income guarantee. “We're being asked to wrap target date structures,” he said. Mr. Cornell said that major institutional asset managers, such as Barclays Global Investors, BlackRock Inc. and Pacific Investment Management Co. LLC, are among the firms that have shown interest in pairing with insurers. “When firms like that focus on this market, you're going to see some real product innovation and distribution get behind it,” he said. “This is the time to start wrapping these.” Still, one of the major obstacles to these marriages between asset managers and insurers has been the carriers' concern about backing assets that another firm is managing, Mr. Cornell said.