Edinburgh loses British Coal small-cap mandate

UK – Edinburgh Fund Managers and Fidelity Investments have lost their UK small-cap mandates for the 19 billion pound (27.6 billion euro) British Coal Pension Schemes.

Following a review, the fund decided to reduce the proportion of its trustee governance budget spent on UK small-cap companies.

The 700 million pound portfolio was previously managed by Schroders Investment Managers, Fidelity Investments and Edinburgh Fund Managers, and the decision has been made to hand the management of the entire portfolio to Schroders. The move sees a loss of 300 million pounds for Edinburgh Fund Managers, but no one at the fund was able to confirm how much was previously managed by Fidelity.

David Morgan, chief executive of Coal Pension Trustees Services Ltd., underlined that the decision was based on a “re-evaluation of the ongoing requirements of the fund”, and, with regards to Edinburgh Fund Managers, said that the schemes remained “supportive of the UK equity small cap team.”

Edinburgh, which had worked with the British Coal scheme for 14 years, has been undergoing management upheaval and slumping profits.

The decision will be another feather in the cap of Schroders, which has been progressively making its mark in the European pension fund manager market. The HSBC Actuaries and Consultants’ annual survey of UK balanced pension fund managers reported Schroders as demonstrating the “greatest turnaround” after having outperformed the average balanced fund 75% of the time, but during the previous two years beat the quarterly average only once.

Looking set to expand further, in its 2002 annual report released last month, Schroders hinted at being on the look out for acquisitions in the asset management area.

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