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Public pension pool awards £400m low vol equity mandate

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Brunel Pension Partnership has selected Quoniam and Robeco to run a low volatility global equity mandate.

The mandate would initially be for £400m (€467m) of investments, but could increase to at least £600m, Brunel said in a statement. The partnership is one of the eight asset pools created by the Local Government Pension Scheme (LGPS).

According to one of the managers, the amount was expected to be split equally between Robeco and Quoniam.

In assessing asset managers’ tenders for the mandate, Mark Mansley, chief investment officer, said Brunel had paid particular attention to how managers addressed the risk of valuation bubbles, and how they used environmental, social and corporate governance considerations to further reduce risk.

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“We were impressed by the clarity of these managers’ investment processes, and, as always, sought out those whose values chimed with our own with regards to successful long-term investment, while bringing their own unique perspectives on successful investment,” Mansley said.

Mark Mansley, chief investment officer, Brunel

Mark Mansley, chief investment officer, Brunel

The low volatility portfolio is the second sub-fund Brunel has launched within its authorised contractual scheme (ACS), a UK tax-efficient fund structure other LGPS pools have also used.

Brunel has also launched a £1.6bn active UK equities fund within the ACS structure, appointing Aberdeen Standard Investments, Baillie Gifford, and Invesco. It is currently searching for managers to run a “flagship” high-alpha global equities fund.

Brunel is a collaboration of 10 LGPS funds that have around £30bn in assets between them. It expects to have long-term relationships with asset managers, and documented its expectations in an “accord” that was publicly unveiled in November.

Further reading

LGPS pooling: Funds under pressure to comply
About 30% of assets have been absorbed by the new LGPS pools – but a recent government consultation has heightened tensions with some of the partnerships

LGPS pool targets long-term manager relationships
The Brunel Pension Partnership has set out expectations for long-term manager relationships as it prepares to bring on board more of its member funds’ assets

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  • Clifton Suspension Bridge Bristol

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  • QN-2559

    Asset class: Multi Assets.
    Asset region: -.
    Size: EUR 15m (may be split into two mandates EUR 7.5m).
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  • QN-2560

    Asset class: Private Equity.
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  • QN-2561

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    Asset region: Global.
    Size: $40m.
    Closing date: 2019-08-30.

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