UK – The one billion pound (1.4 billion euro) defined benefit pension scheme of shipping company P&O has awarded a 50 million pound (71.2 million euro) global high yield bond mandate to Muzinich & Co.
The decision follows an asset allocation review assisted by Watson Wyatt, Muzinich said.
P&O fund secretary Rita Powell said: “Like many other schemes we wanted to invest a portion of our funds in a return seeking asset class that was potentially less volatile than equities and provided diversification.”
Muzinich did not replace another manager at P&O, said Francis Paxton, head of institutional marketing at Muzinich. He said: “We are delighted to have been awarded this extremely important mandate.
“There has been a huge surge of interest in High Yield bonds from UK pension funds. We anticipate that this movement will gather momentum as investors increasingly recognise that the asset class can potentially generate both strong returns, and can also act as a portfolio risk diversifier relative to equities and other bond classes.
Muzinich currently manages more than 100 million pounds for four UK pension schemes, and has over 3.6 billion dollars in assets under management in total.