Protection fund appoints five new asset managers
UK - The London-based Pension Protection Fund (PPF) has diversified its portfolio and appointed five new fund managers for its £305m (€446.3m) investment fund, set to grow to £5bn by 2009.
State Street Global Advisors and Lazard Asset Management will manage the £38.13m UK equities portfolio, while Newton Investment Management takes on a £22.9m global equity mandate.
The PFF, which made the appointments after a formal tender procedure last October in which they were assisted by consultancy firm Mercer, added that Morely fund management will manage property, representing 7.5% of the fund.
Lastly, Auriel Capital Management, a specialist boutique quantitative manager, has been appointed to manage a £7.63m currency portfolio.
A spokesperson for the fund told IPE today that the scheme's entire assets are set to grow to £2bn in the next financial year, and to £5bn by 2009. The PPF expects investment returns to match levy income in five years.
Commenting on the new appointments, PPF chief executive Partha Dasgupta said in a statement: "These appointments will be crucial in maximising [our investment] returns while helping build a solid balance sheet for the PPF."
The remainder of the PPF's fund is invested 50% in global bonds and 20% in cash, managed by existing fund managers among which Goldman Sachs and Pimco.
The fund also announced that today was the completion of an interest rate and inflation ‘swap hedge' - managed by Insight, one of the PPF's existing fund managers.
"This minimises exposure to sensitivities affecting PPF liabilities and allows the rest of the portfolio to be managed against appropriate asset benchmarks," commented the PPF.
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