UK - Essex County Council has restructured its £1.5bn (e2.35bn) pension fund resulting in eight new specialist mandates, and costing Merrill Lynch its balanced active mandate.
Earlier in the year, the local authority decided to restructure the fund, switching around 50% of the assets into specialist mandates.
Legal & General which had been managing a passive UK equity mandate for Essex, has been reappointed to manage the new replacement mandate – a passive multi-asset mandate. This now accounts for around 30% of the fund, from 12% originally.
Henderson has retained its bond mandate, and has seen it increased to around 8% of the fund. A new specialist bond mandate, also around 8% of the fund, was awarded to Prudential M&G.
Six satellite high performance equity mandates have been introduced by Essex. Mirabaud & Cie, Marathon Asset Management and Investec will be managing UK equity mandates; Nomura has been appointed to manage the Japanese equity mandate; First State is to manage an emerging markets portfolio; and APS Asset Management for Far-East ex-Japan. Each mandate accounts for around 1% - 2% of Essex County Council’s pension fund.
The remainder of the fund is invested with Capital International, which runs a global ex-UK equity mandate; Morley, which manages a property portfolio; Hermes, which runs a focus fund active mandate, and a handful of private equity managers.
Bailley Gifford has had its mandate changed form balanced to global equity, resulting in the manager losing the proportion of its fund dedicated to bonds. Merrill Lynch, which managed a balanced active mandate for the scheme, has lost its portfolio.
“There wasn’t a place among the new mandates for Merrill Lynch,” says a spokesman for Essex.