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IPE special report May 2018

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Buckingham cuts Capital mandate in revamp

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UK – The £874m (€1.3bn) Buckinghamshire Pension Fund has cut Capital International’s equities mandate by just over 20% due to poor performance results, and appointed five new fund managers.

The scheme sliced Capital’s £220m international equities mandate to £175m towards the end of October.

Capital has recently come under scrutiny from several public sector pension funds for performance-related matters, most notably the £20bn Universities Superannuation Scheme.

Reports last week stated the Scheme was unhappy with Capital’s performance. Furthermore, the Suffolk County Council, the London Borough of Islington and the Pension Trust have put the giant US manager under review.

Buckinghamshire has awarded mandates to Standard Life Investments, Alliance Capital, Blackstone Alternative Asset Management, Merrill Lynch Investment Managers and Pantheon Private Equity.

According to a fund spokesperson, the new mandates were awarded due to a combination of Capital’s poor performance and general restructuring at the scheme.

The fund – advised by Mercer – is looking to diversify investments without increasing the risk profile.

Standard Life was awarded 8% of the scheme’s assets in a £73m UK equity mandate. Alliance Capital was also handed 8% of the fund through a global equity mandate.

A move to more alternative investments has seen Blackstone and MLIM scoop a ‘cash/inflation plus’ mandate, each representing 2% of the fund’s assets. Pantheon has also been appointed to manage £25m in a global fund of private equity funds.

The Buckinghamshire spokesperson stated that its mandate with Capital is ongoing, but that it monitors all its mandates on a continuous basis regarding performance levels.

Capital officials did not respond to requests for comment.

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