BAA scheme in partial shift to enhanced indexing
UK – The pension scheme of international airports group, BAA, has moved some of its portfolio out of a passive strategy into an enhanced index strategy.
The BAA fund has decided to switch half of its 250 million-pound (356 million-euro) passive equity mandate run by State Street Global Advisors into an enhanced global equity mandate.
The switch does not represent a loss for State Street Global Advisors, as it will be running the 125 million-pound (178 million-euro) enhanced global equity mandate.
Eric Hunt, group pensions manager, said he believed that “an enhanced indexation approach is appropriate for the long term objectives for the scheme’s investment strategy”. He added that SSGA was selected as a result of its expertise and track record in the area.
According to Kanesh Lakhani, head of European marketing and consultant relations at SSGA, interest in enhanced indexation is continuing to grow among UK pension funds.
Enhanced indexation provides the investor with the benefits of both indexation and active management, by combining a large exposure to index trackers with a selection of traditional active managers.
SSGA manages 901 billion dollars in investment programmes and portfolios worldwide.