UK - Mercer has bolstered its implemented consulting offering following an appointment to the £40m (€46.6m) British Horseracing Authority (BHA) pension fund.
The mandate brings the total number of clients under Mercer's ‘implemented investment solutions' umbrella to three, with a further six in the pipeline. However the consultant is yet to announce a client with more than £140m in assets.
Dan Melley, client director in Mercer's implemented investment solutions team, told IPE: "Of the three clients funded, their respective asset sizes are £120m, £40m and £140m. However the pipeline of clients that are considering us range in size into the billions. The attraction of the offering is not asset size dependent; it comes down to whether the trustees have an end game strategy in mind and their assessment as to how they can most effectively implement that strategy."
Mercer's derisking approach agrees a target date with the client to achieve a fully funded position which it attempts to hit through a combination of liability-driven investment and return-seeking strategies. The portfolio is managed on a daily basis, locking in any gains automatically or implementing damage limitation strategies should the markets fall.
Melley said Mercer would manage the BHA fund using a growth portfolio which targeted returns from a diverse source of risk drivers, including illiquidity, economic growth and equity risk premium.
"Assets could be invested across developed and emerging market equities, alternatives and credit to balance the risk driver exposures," he added.
Steve Broughton, chairman of the BHA trustees, said the pension fund wanted a robust governance arrangement that would allow it to focus on the strategic aspects "while delegating the management of our investments to market-leading experts".