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Henderson loses out in North Yorkshire revamp

UK – The £880m (€1.31bn) North Yorkshire Pension Fund has dismissed Henderson Global Investors from a balanced mandate worth 22% of the fund.

Henderson lost the brief following what the fund calls a “comprehensive review of the investment strategy”, which has introduced a specialist approach and has led to the appointment of two new managers.

Principal accountant Neil Sellstrom told IPE that the fund had “fallen out” with Henderson over performance.

Henderson was the only casualty among the four current managers, Baillie Gifford, in charge of 25%, Barclays Global Investors (23%) and Standard Life (23%) and Hermes Pensions Management (4%) and small boutiques.

The three main managers’ global mandates were converted to global equities marked against at a FTSE-based customized benchmark. They will also manage Henderson’s equity portfolio share. Henderson declined to comment.

The fund, advised by independent consultant Philip Williams, appointed Crédit Agricole Asset Management and European Credit Management over 10 short-listed managers to manage the fund’s bond portfolio.

Each will manage a mandate worth £100m and the expected out-performance is 3% a year. The bond portfolio is invested 85% in UK index-linked gilts and 15% in UK fixed income gilts, with maturities exceeding 15 years.

“In both cases the manager will have as their benchmark the ‘least risk portfolio’ as agreed by the actuary,” said the North Yorkshire Pension Fund.

John Weighell, chairman of the pension fund committee and leader of North Yorkshire County Council, said: “We have introduced these changes to enhance the efficiency and effectiveness of the way the pension fund assets are managed.”

“It is hoped that the new arrangements will improve the Fund’s ability to meet the exacting performance standards set by the pension fund committee.”

JP Morgan Investor Services, which already act as the global custodian and provide performance measurement for the Fund, will handle the transition.

The changes will become operational from next month.

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