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ESG: The metrics jigsaw

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UK roundup: Aggregate Industries, Just Retirement, PiP, PPF

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The Aggregate Industries Pension Plan has secured a £135m (€158.5m) buy-in with Just Retirement covering more than 750 members of the construction materials supplier’s pension scheme.

It follows a £210m buy-in completed in 2010 and means the pension scheme has insured half of its liabilities.

Ian McGown, head of pensions and reward at Aggregate Industries, said: “In uncertain economic times, Just Retirement was able to offer attractive financial and commercial terms.”

Charlie Finch, partner at LCP and lead adviser on the transaction, said: “A series of buy-ins provides a cost-effective de-risking strategy in an uncertain world. The plan has now insured half of its liabilities, timing the buy-ins to benefit from market opportunities as they arise.” 

Elsewhere, the UK’s Pensions Infrastructure Platform’s (PIP) Multi-Strategy Infrastructure Fund (MSIF), its inaugural in-house fund, has made its first equity investment.

The PiP was set up in 2011 and is backed by the Pensions and Lifetime Savings Association as a method of channelling pension fund investment into UK infrastructure.

The MSIF, which is targeting a £1bn capital raise, had by its first close in April attracted £125m from the West Midlands Pension Fund, Strathclyde Pension Fund and others.

The PiP said MSIF bought a portfolio of 31 individual wind turbines from Ingenious Infrastructure and AGR’s Golden Square Energy joint venture. 

Predictable revenues linked to the UK’s feed-in tariff, combined with guaranteed availability under long-term operation and maintenance contracts, will provide investors with 20 years of inflation-linked cash flows to help meet long-term pension obligations, the PiP said.

JP Morgan Asset Management has cut the charges on its JPMorgan Life Diversified Growth Fund from 75 basis points to 40bps.

It has also adjusted its target, now aiming to deliver “cash plus 4% over a market cycle”, the asset manager said in a statement.

The move follows a scathing review of the asset management sector by the Financial Conduct Authority, which criticised “weak” price competition among actively managed funds.

While JP Morgan did not reference the review, it said the changes aimed to “maximise competitiveness”. 

The fee cut was made possible by JP Morgan using its in-house Research Enhanced Index strategies for its underlying equities exposure.

“The REI strategies seek to deliver consistent excess returns at low active risk by managing an index-like portfolio designed to source the majority of alpha from stock selection,” the company said.

Meanwhile, the Pension Protection Fund (PPF) has made changes to calculations it uses to assess schemes for entry into its protection and to charge a levy for existing schemes.

Following a consultation, the PPF has updated its mortality assumptions, adjusted the yield indices it uses to “better match average liability durations” and introduced separate discount rates for pensioners and non-pensioners.

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