Schroders, the fund manager, will try to fight back into the institutional market this month after a series of setbacks, with a fund that allows small pension schemes to replicate the investment strategies of giant final salary schemes, The Times has learnt.

The manager, which last month lost Strathclyde Pension Fund, one of its biggest clients, has made a number of appointments to strengthen its institutional team.

Schroders suffered net institutional outflows of £4.6 billion in the first half of 2006 and a net outflow of £1.8 billion in the third quarter. It is thought also to have lost part of the mandate to run a portion of the BBC’s £8 billion pension fund.

The new product, developed by the fund manager’s multiasset specialists, will be called the Schroders Diversified Global Equity Fund. Described as a core/satellite approach, it will allow institutional clients to invest in a core portfolio of UK and international stocks, and have exposure to more high-risk investments such as unconstrained global equities and high-alpha UK equities.

Moves in and out of the more risky stocks will be governed by quantitative analysis by Schroder’s multi-asset team, which manages £20 billion.

Usually, such an investment approach, if undertaken by an individual pension fund, would require advice from an asset manager on each type of equity, which puts the total price of putting the investments in place out of the range of most small and medium-sized pension funds.

Gareth Henry, director of strategic solutions at Schroders, said: “The approach is designed to take risk where there’s a higher degree of certainty of achieving outperformance.”

Mr Henry, who has been appointed to sell the fund to Schroder’s 655 UK pension fund clients, said that he would also target large retirement schemes.

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