NILGOSC adopts unconstrained equity mandates
UK - The Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) has awarded four new unconstrained equity mandates, which include the appointment of two new managers.
NILGOSC, which administers the £3.1bn (€3.9bn) Local Government Pension Scheme for Northern Ireland, confirmed it has appointed Jupiter and BlackRock to each run an unconstrained UK equity mandate valued at £200m.
In addition, Deane Morrice, fund secretary at NILGOSC, revealed Baillie Gifford and Wellington management had each been made responsible for a £150m global unconstrained equity portfolio.
The new mandates are in addition to the fund's existing managers, with Bailie Gifford and Wellington running the new portfolios alongside their existing commitments to the fund, relating to active UK and global equities respectively.
The appointment follows a decision at the fund's annual investment review in June 2007 in which it was decided to allocate assets to absolute return or unconstrained equity mandates.
Morrice said: "We felt we had quite a lot of money in equities, in passive as well as active portfolios, so by taking a small proportion and moving it to unconstrained mandates we can increase our risk-taking in the hope of making better returns."
The two new global equity mandates were funded by the scheme in July, and it is expected the two UK equity portfolios will receive funding by October, although the allocation of the fund will remain at 74% equities, 8.5% in fixed income, 9.5% in cash and the rest of the assets amount to around £250m in property.
The most recent performance figures from the fund showed it returned -2.6% in the year ending 31 March 2008, however over a three-year period the scheme achieved a result of 9.2%, and an even better 12.2% over a five-year period.
Morrice suggested it was unlikely the scheme would be appointing any additional new managers in the near future, and claimed any changes resulting from the latest review in June 2008 would be "pretty minor" with perhaps a move from UK gilts to corporate bonds in the next six months and maybe an increased allocation to property depending on the market situation.
Most recently, NILGOSC confirmed it was named as a lead plaintiff in a class action against Lehman Brothers, along with the Lothian Pension Fund, over claims relating to sub-prime losses. (See earlier IPE article: UK pension funds co-lead in Lehman Bros action)
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