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Kingston finalises restructuring with eight manager hires

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  • Kingston finalises restructuring with eight manager hires

UK - Eight new investment managers have been appointed by the Royal Borough of Kingston-Upon-Thames as part of the restructuring process of its £278.7m (€322.2m) pension fund investment portfolio.

The council confirmed in July 2008 it was diversifying away from its original strategy of 70% of assets managed on a passive basis and the remaining 30% invested in an active global equity mandate, as UBS Global Asset Management had managed the whole fund on a passive basis since June 2007. (See earlier IPE article: Kingston restructures 'inefficient' portfolio)

As part of a framework agreement, Kingston has now appointed two investment managers to each of the following portfolios:

Global equity 'core' mandate - split between Fidelity International and Axa Rosenberg Investment Management; Global equity 'high alpha' mandate - split between Threadneedle Asset Management and Edinburgh Partners; Global equity 'unconstrained' mandate - split between Schroder Investment Management and Martin Currie Investment Management, and UK bonds mandate - split between Henderson Global Investors and Standard Life Investments.

Meanwhile, minutes from Kingston's latest pension fund panel meeting confirmed it had agreed to appoint State Street as the transition manager, to aid in the transfer of the pension fund's assets to the new managers, and was awaiting approval from the Council's executive. (See earlier IPE article: Kingston seeks transition manager for portfolio restructure)

Completion of the new manager line-up and transition provider follows the re-appointment of JP Morgan as the pension fund's custodian in February. (See earlier IPE article: Kingston awards JP Morgan custody contract)

It also comes at the same time as the pension fund confimed it returned -16.3% in the year to 31 March 2009, bringing the value of the scheme down from £322.9m to £278.7m, albeit this performance was better than the benchmark return of -20.2%.

Draft annual accounts for 2008/09 showed the pension scheme, which had £4m of assets managed internally and the remainder with UBS, lost £61.6m over the year following turbulence in the financial markets, although the losses were offset by new investment - from employer and employee contributions - of £17.4m.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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