The £3.5bn (e5.7bn) Diageo UK pension scheme – the amalgamation of the former GrandMet and GUD pensions schemes, has awarded 12 specialist equity mandates as part of its new investment strategy.
The bulk of the assets remain in UK equities with Mercury, Schroder and Jupiter all picking up £350m apiece.
Capital International has scooped a £350m world ex-multinationals mandate and for the same asset class, three £115m mandates were awarded to Marathon, Mercury and Cohen, Klingenstein & Marks.
The fund has also awarded a number of ‘multinational’ index briefs – BGI wins £525m and Wellington and Capital International pick up £262m each.
FDP Savills will manage £350m of the property mandate.
Pantheon and Northern Trust will be in charge of two £525m small cap and venture capital portfolios acting in a managers of managers capacity. The Northern Trust arrangement will initially comprise Amerindo, Malabar, Meditor and Shiozumi.
The overall strategic asset allocation for Diageo is based on benchmark weightings of 80% ‘mainstream’ equities, 10% small companies and venture capital and 10% property and the pension fund’s investment committee interviewed 33 managers for the mandates.
While the new allocation reduces the scheme’s exposure to UK-based companies – 50% of the fund’s assets remain invested domestically.
Gareth Williams, chairman of the pension fund’s trustees, says the restructuring was needed to achieve a coherent investment strategy. “Trustees approached their task with a clean sheet of paper and focused on producing the most appropriate strategy going forward, without regard for the way in which assets were previously invested, or the performance achieved by the previous approach.”
Clay Finlay, Phillips & Drew, Montgomery, David L Babson and Deutsche Asset Management were all dropped from the fund’s portfolios.
The transition of the scheme’s existing portfolios will be managed by Mercury Asset Manager. Paula Garrido