UK – The £1.4bn (€2.05bn) Metal Box Pension Scheme has appointed PIMCO Europe to manage a £100m bond brief, funded via a relocation of resources within the bond portfolio.

PIMCO joins Western Asset Management and Merrill Lynch Investment Managers which currently run the bond portfolio, said Philip Read, UK pensions manager at Metal Box Pension Trustees.

Read said the fund invests 52% of its portfolio in bonds and the balance in “return-seeking assets” such as equities, private equity, hedge funds and property.

“We look forward to working with PIMCO to help achieve the demanding investment goals we have set for our pension fund,” Read was quoted in a statement issued by PIMCO.

The trustees of the scheme, which is fully funded under the FRS17 accounting standard, was assisted in the choice by Watson Wyatt. Northern Trust is scheme custodian.

Paul Craven, PIMCO's head of UK institutional business development said: "We are delighted to be working with the trustees of the Metal Box Pension scheme.”

The mandate is to be benchmarked against fixed, index-linked and corporate UK bonds and an allocation to global high-yield bonds, hedged into sterling.

PIMCO, the fixed income specialist unit of Allianz Global Investors, said in a statement that it is to target excess returns of 1.5% to 2% per annum relative to the benchmark.

PIMCO said it has about than £20bn managed in continental Europe and the United Kingdom and more than £275bn worldwide.