UK - Cumbria County Council is making its first move into investing in alternatives with the appointment of asset manager Blackrock, as well as shift into global equities.
Cumbria's head of finance strategy Simon Smith said having reviewed its overall strategy, the £1.2bn (€1.7bn) pension fund has awarded two mandates totalling up to 20% of its asset allocation.
BlackRock will advise the pension fund in its investment of up to 10% of its assets in "a tailored portfolio of alternatives" including private equity, global (ex-UK) property, fund of hedge funds, single strategy hedge funds, global tactical asset allocation (GTAA), commodities, infrastructure, emerging market debt and high-yield debt.
At the same time, Newton Investment Management has been awarded a global equity mandate "in the region of £100m", said Smith, after deciding to shift away from holding two UK equity mandates to hold assets in overseas equity, UK equity, bonds, along with some passive assets managed by Legal & General, as well as its alternatives selection.
"This stems from an investment strategy review the pensions committee has operated for a number of months. Rather than have two UK equity mandates, [the pension fund committee] decided they should keep on diversifying risk and move to alternatives," said Smith.
"We chose BlackRock for their ability to balance risk and deliver on the pension fund's requirements by pulling it together rather than the pension fund monitoring [a portfolio of alternatives] separately. These are pressures for our staff if they have to be so involved but the questions they asked were how would they get visibility when BlackRock could provide a good range of diversified assets," he added.
Mercer Investment Consulting assisted Cumbria in its review and beauty parade.