UK – The London Pension Fund Authority has pulled a total of £460m (€677m) from Henderson Global Investors as part of an investment review.
Henderson had run a £180m global bonds brief for the LPFA’s Active Sub-fund and £280m for its Pensioner Sub-fund. A Henderson spokesman said it was always a shame to lose a client but that the firm was “quite well set” for the continued trend away from balanced to specialist mandates.
The LPFA has reorganised its manager roster following a review of its investment strategy.
The new strategy – reported by IPE in August – moves away from a bond/equity structure towards one it says is “more closely related to liabilities and cash flow requirements”.
“It will take a more aggressive approach to seeking returns, while managing risk through diversification and the introduction of a currency overlay,” the LPFA said in a release today.
“The LPFA will no longer be a large and passive holder of index-linked gilts but a will adopt a longer-term focus, actively seeking to meet its funding strategy and thus liabilities,” said chairman Neil Newton.
The fund was advised by Hymans Robertson as well as Peter Moon of the Universities Superannuation Scheme and former Legal & General investment head David Rough. Merrill Lynch managed the portfolio transition in association with the custodian, JP Morgan.
Meanwhile Henderson Group has agreed to sell its Towry Law advisory division to JS&P Holdings Ltd. for £37m – with part of the part of the proceeds to be contributed to the Henderson Group Defined Benefit Pension Scheme.
Henderson reiterated that total assets under management at HGI were expected to be slightly lower at the end of December than at the six-month stage, “due to expected client outflows associated with the run-off of Pearl Group funds and Henderson's institutional business”.
Active Sub-fund (£1.8bn)
- 75% global equities (LGIM, HGI, GSAM)
- 10% global bonds (HGI)
- 15% property, private equity, cash
- 65% global equities (GSAM, MFS, Newton, currency overlay - Record)
- 20% target return (MLIM, UBS)
- other (property, private equity, cash)
Pensioner Sub-fund (£1.4bn)
- 15% global equities (LGIM)
- 20% global bonds (HGI)
- 65% index linked gilts/cash (passive)
- 12.5% global equities (LGIM)
- cash-flow matching bonds (ECM, BGI, Insight)