G4S pension to get fiduciary management treatment
08 Dec 2009 15:15
UK – Trustees of the G4S pension schemes have appointed Cardano UK to deliver its version of fiduciary management, known as Solvency Management, to the GSL part of its pension arrangements.
Cardano officials were unwilling to reveal which of G4S’s two defined benefit pension plans it will be looking after. However, it has been confirmed that Cardano will manage the overall relationship between the assets and liabilities of the scheme of some its pension arrangements, delivering risk management, dynamic asset allocation and manager selection.
According to information available on Pensions Funds Online, the Securicor Group Pension Scheme was last listed on the site as having approximately £960m (€1.06bn) in assets while the second scheme, the Group 4 Pension Scheme, had assets worth approximately £216m. In the case of both schemes, Mercer was listed as the investment adviser.
Kerrin Rosenberg, CEO of Cardano UK, said the intention with the GSL element of the G4S' pension arrangements is to adopt a similar, albeit “quite an unusual”, investment strategy to that applied elsewhere for Cardano’s clients, and tap the opportunities open to pension funds seeking a cautious approach to the markets.
“We are extremely cautious of the market,” said Rosenberg. “We think that equity risks, in particular, are not very well-rewarded so we are not keen on equities. We think economic growth is going to be slow and painful of a number of years. So most of the opportunities we are exploiting at the moment are within sectors carrying long and short opportunities, and investments that will benefit from volatility. They are in non-conventional investments."
He continued: “At the same time, we hedge the liability risk quite closely. This leaves us very cautious of the market so we can be more manager-specific. The model portfolio is quite different from most UK pension funds,” he added.
Explaining Cardano’s appointment, Richard Malone, chairman of the G4S Trustees, said: “We have chosen Cardano because we like their focus on managing both assets and liabilities. They have a very hands-on approach, actively managing the portfolio, and being dynamic to seize good opportunities. Cardano are also able to access a wide range of investments, rather than only the traditional asset classes, which will help better diversify our portfolio.”
G4S is a global company delivering outsourcing services such as security management.
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Author: Julie Henderson
