Fund discusses costs with managers
The e11bn British Coal Staff Superannuation Scheme is in discussions with two of its managers – Schroder Investment Management and Edinburgh Fund Management – as to how they can cut transaction costs after it emerged that Goldman Sachs Asset Management saved the scheme e775,000.
Joint transaction cost analysis by the scheme and Goldman Sachs, manager of more than £9bn of the fund’s assets, have made the savings over the past four years. Goldman Sachs has been comparing transaction data from the fund with figures from Elkins/McSherry in an attempt to minimise brokerage costs.
David Morgan, chief executive at the coal fund, says understanding transaction costs is a key component of its work. “Commission for the Scheme amounts to some £10m in a year and the potential timing and opportunity costs and market impact are significantly greater than that.”