UK - The Cooperative Group's £5bn (€5.39bn) Pension Average Career Earnings (PACE) scheme has signed Mercer to deliver implemented consulting on its alternatives investments portfolio.
Mercer will be required to phase in the outsourced decision-making over the alternatives portfolio over two years, and is therefore tasked with looking after 13% of the pension fund's assets.
This is just the latest move by pension funds to consider a move into fiduciary management, under whatever label consultants may give, and follows a pattern predicted by fiduciary selection experts who said UK pension funds were more likely to apply the concept to a section of a scheme, to test it. (See earlier IPE story: Advisers to support trustees in search for fiduciary manager)
Mike Thorpe, Pension Finance & Risk Controller at The Co-operative Group, said Mercer had won the mandate as its solution offered "benefits on many fronts" and was said to be "particularly strong from a governance perspective", as well as delivering confidence in "the depth of Mercer's research that underpins the selection and monitoring of managers".
The Coop PACE scheme has been under review for the best part of two years now as officials revealed in 2007 that there were plans to diversify and de-risk the pension fund, while an investment review was expected to be completed by the end of 2008. (See earlier IPE stories: £5.3bn fund confirms custody consolidation and Co-operative fund on diversification streak)