June 11 (Reuters) - Insurance brokerage firm Marsh McLennan's 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 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 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. (Reporting by Niket Nishant in Bengaluru; Editing by Vijay Kishore)