The £3bn (e4.5bn) pension fund for UK retail group Marks & Spencer has dropped UK fund manager Phillips & Drew (P&D) from a £600m global bond mandate, following almost two years of underperformance against the benchmark. P&D also loses the custody arrangement carried out by itself on the assets, which has now passed into the hands of State Street.
From a longlist of 10 drawn up by Watson Wyatt, M&S has selected Henderson Investors and Rothschild Asset Management to spilt the assets, taking £300m each of the global bond brief previously held by P&D.
Roger Platt, asset management controller at M&S says: “The P&D mandate had a blended benchmark of UK straight gilts, index linked gilts and overseas bonds, and the performance of the bonds over the last 12 to 24 months had failed to reach the benchmark. The board decided after looking at some alternative strategies that we would make a straight manager swap. We had experience with Rothschild from our unit trust investments and were comfortable with their pro-cesses. Henderson best met our investment criteria amongst the competition.”