Lothian appoints three transition managers
UK - The £2.6bn (€2.97bn) Lothian Pension Fund has appointed BNY ConvergEx, Barclays Global Investors and State Street to its transition panel for pension fund investment services.
This brings the number of managers on the panel to four, with Goldman Sachs already in place.
The pension fund says the additional transition managers have been hired in preparation for the change to a new investment strategy planned for the near future (See earlier IPE article: Lothian focuses on alternatives in new strategy).
The contracts will be open-ended, with the managers appointed on a call-off basis- where one manager is chosen to deal with a specific mandate on a temporary basis as and when a transition occurs.
The pension schemes covered by these arrangements are Lothian Pension Fund, Lothian Buses Pension Fund and Scottish Homes Pension Fund, all administered by the City of Edinburgh Council.
Draft accounts show that Lothian Pension Fund made a return of 5.1% for the quarter to 30 June 2009, against a benchmark return of 7.7% over the same period. Over the 12 months to the same date, the fund lost 12.2%, compared with a 17.3% loss by the benchmark.
As at 30 June 2009, the fund's market value was £2.4bn but this had recovered to £2.6bn by 31 July. However, this was still £300m lower than the fund's £2.9bn value as at 30 June 2008.
Lothian Buses Pension Fund had a value of £170m as at 30 June 2009, up £10.5m from its value the previous quarter, but still down from its £196.3m value as at 30 June 2008.
As at 30 June 2009, Scottish Homes Pension Fund was valued at £106.5m, up £3.6m over the previous quarter but down from £124.6m as at end-June 2008.