The UK £180m (E294) GMB Union pension fund has appointed Hermes Liberty to manage a £110m global index tracker mandate split into UK ex Europe, Europe, US, Japan and Far East ex Japan portions.
Bill Day, national pensions officer at the GMB says four firms pitched for the mandate: “We entered this process having never gone passive before, but we were surprised at the difference in tracking error between the organisations. Hermes had the smallest tracking error, and significantly they are also prepared to allow us to vote with our shares.”
Phillips & Drew is the losing incumbent, with Day noting that the fund ‘lost faith’ with the firm’s investment predictions. Consequently, Hermes has also been handed a £60m fixed-interest portfolio and £20m active brief in Hermes Lens focus ‘activism’ fund at the expense of Phillips & Drew.
Punter Southall acted as consultants.