The Civil Aviation Authority Pension Scheme (CAAPS) has appointed BlackRock as fiduciary manager handling £4bn (€4.4bn) for both its CAA and NATS – formerly known as the National Air Traffic Services – sections.
After a competitive tender process, facilitated by IC Select, CAAPS selected BlackRock to plan and execute both sections’ asset allocation and manager selection decisions across all asset classes.
The CAAPS trustees will also be provided with training, guidance and transition management services, an announcement disclosed.
Sarah Melvin, head of UK at BlackRock, said: “A vast number of schemes are currently navigating an uncertain global environment, and more and more making the decision to outsource.”
At the beginning of the year BlackRock appointed Alex Pollak as head of clients for its UK fiduciary management business as it prepared for an expected increase in new business enquiries in 2020.
Following rules that came into force last December, UK pension schemes must tender any fiduciary mandate that outsources more than 20% of assets. Existing mandates must also be tendered within a set timeframe, which has led several providers and consultants to hire new staff to cope with the increased workload.
The announcement said that BlackRock responded to CAAPS’ requirements for a bespoke approach and the firm was selected due to its consistent focus on partnership, risk management, and a differentiated approach to asset allocation.
Joanna Matthews, independent chair for CAAPS, said that BlackRock was selected because “they were a good cultural fit and they clearly demonstrated the strength of their investment offering and the scale and depth of their resources.”
BlackRock will build a custom portfolio according to each sections’ needs while aiming to build in greater portfolio resilience, which may provide less volatile results in increasingly uncertain times.
Additionally, the use of Aladdin, BlackRock’s risk platform, will play a central role helping to understand the risk and return characteristics driving funding levels.
The platform’s thorough analysis will assist BlackRock in building the sections’ portfolios with more stable returns, with the goal of helping CAAPS members receive their pension benefits.
Sion Cole, head of UK fiduciary business at BlackRock, added: “Providing a whole portfolio approach when making asset allocation decisions allows us to create and deliver a truly tailored and innovative portfolio for CAAPS, helping them to secure the retirement benefits of their members.”