UK - One of the UK's largest local authority pension schemes has terminated a mandate with Aberdeen Property Investors and put several other fund managers on alert.

The £9.6bn Strathclyde Pension fund has replaced Aberdeen as manager of a UK direct real estate portfolio, worth 2% of the total assets, with DTZ.

The Strathclyde scheme follows a traffic light system to keep fund managers under scrutiny, and Aberdeen's exclusion from the scheme followed its progress from amber to red alert.

Other providers also facing potential review include global equity manager Edinburgh Partners following significant underperformance of -14.3% to June compared with -10.7% from the benchmark.

Threadneedle Asset Management is also on amber alert after underperformance was accompanied by the departure of key staff Peter Allwright and Stuart Frost, co-managers on the absolute return bond and target return funds.

Strathclyde's investment consultant Hymans Robertson had recommended Threadneedle lose its position at the scheme.

However, the Investment Advisory Panel has since chosen to retain the fund manager for at least another six months, keeping it under close watch.

Currency overlay manager Record is also facing Strathclyde's scrutiny following persistent underperformance and has had its currency alpha mandate suspended.

Strathclyde said: "The [Investment Advisory] Panel recognised Record's process could be successful again once developed market interest rates begin to diverge as they have in the past, [and] they agreed it would be worthwhile temporarily suspending investment in the Record Currency Alpha product."

Record will continue to run a notional £1m portfolio until Strathclyde either reinvests or terminates the brief.

In further developments at the Scottish local authority, Lazard Asset Management, which runs a global equity mandate and had come in for criticism for failing to comply with

Strathclyde's responsible investment policy, has since hired Trucost to support shareholder engagement and voting activity.

Strathclyde's September SRI report stated: "Lazard believes that using Trucost's data will assist in the analysis of a company's environmental damage costs relative to its industry sector peers and also a portfolios' environmental damage costs relative to its respective benchmark.

"Lazard is currently working on how this data can be integrated into its normal investment process."

Elsewhere, Strathclyde has extended Legal & General's brief as transition manager, while removing Nomura from the role.

The Japanese manager had taken over from the collapsed Lehman Brothers, which meant there were no formal contracts in place, forcing Strathclyde to retender.

L&G is now sole transition manager at the pension fund.
 

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