June 11 (Reuters) - Insurance brokerage firm Marsh

McLennan's ( MMC ) unit Mercer has agreed to buy Cardano, a

London-based pension fund manager that oversees $66 billion of

assets, to widen its foothold in the UK market.

The deal, unveiled on Tuesday, will allow Mercer to

capitalize on the increasing demand for pension management

services due to a challenging economic environment.

During times of uncertainty, companies can choose to

outsource the management of employees' retirement funds to firms

like Cardano, which typically have more expertise in navigating

financial markets than their in-house investment teams.

Private equity firms and other institutional investors can

also partner with such fund managers to get additional capital

which they can use for their investments.

Philip Parkinson, the head of retirement and investments at

Mercer's UK business, said the deal will allow the company to

lure non-pension clients as well, including family offices and

endowments.

Mercer is part of Marsh McLennan's ( MMC ) consulting arm, which

accounted for 38% of the company's revenue last year. As of

December-end, it had about 24,500 employees.

It has been on an acquisition spree in the last few years,

snapping up the financial advisory business of Australia's

Westpac Banking Corp ( WEBNF ) and a Minnesota-based human

resources technology firm.

Cardano, founded in 2000, employs nearly 550 people in the

UK and the Netherlands. Its deal with Mercer is expected to

close towards the end of this year.