UK – Schroder Investment Management has been dropped as the main fund manager for the 850 million-pound (1.22 billion-euro) pension fund of Nationwide Building Society as a result of poor performance.
Schroder IM managed 66% of the total fund on a balanced basis, investing in UK and overseas equities, and bonds, but a consistent underperformance has resulted the mandate being lost. Said a spokesman for Nationwide: “Schroders underperformed for a rolling three-year period.”
Nationwide has now restructured the pension funds to a specialist approach. UBS Global Asset Management, which previously managed 34% of the scheme on a passive/balanced strategy, now manages 30% in an index-tracking portfolio. Barclays Global Investors manages 45% in UK and global equities on an active basis, and Fidelity Investments manages 40% of the fund in a bond portfolio, split 40% in UK fixed interest, and 60% in corporate bonds.
Nationwide has also appointed Northern Trust as its custodian. Previously the custody arms of Schroder Investment Management and UBS Global Asset Management were respective custodians.
The spokesman emphasised, however, that Nationwide has not cut ties with Schroder IM, and that the fund manager manages a UK equity portfolio for its insurance assets, and also runs a small executive pension scheme.
And while Schroder Investment Management may be losing out on balanced mandates, it is winning UK property business. The Highland Council Pension Fund has just appointed the Schroder Property Investment Management for a 40 million-pound (57 million-euro) property fund of funds mandate.