Royal Bank shifts to specialists in revamp
UK - The Royal Bank of Scotland has hired seven new specialist asset managers in a revamp of its 12 billion-pound (18 billon-euro) pension fund that was previously exclusively managed by Gartmore and Newton.
Alliance Bernstein, Baillie Gifford & Co, Legal & General Investment Management Limited, Standard Life Investments, State Street Global Advisors Limited, UBS Global Asset Management Ltd. and Western Asset Management have been chosen to join Gartmore and Newton.
RBS said that following the merger of the former pension schemes for the Royal Bank of Scotland and National Westminster Bank “a comprehensive review of investment strategy and management arrangements for the merged scheme was undertaken”.
It added: “The trustees concluded that a multi-manager structure with a core of assets managed on an indexed basis and a number of specialist active managers would be the most appropriate.”
Gartmore, which was sold by RBS to US insurer Nationwide Mutual in 2000, said the shift was not a surprise.
“At that time, it was clear that Gartmore’s balanced mandate to exclusively manage the NatWest Pension Fund [now merged with the RBS Staff Pension Scheme to form the RBS Group Pension_Fund] would change at some point.”
“This balanced mandate has now ended,” said Gartmore chief executive Glyn Jones said in a statement.
Jones said RBS awarded Gartmore a private equity fund of funds and a corporate bond mandate. He did disclose the size of the briefs. “We look forward to continuing our close relationship and continuing to provide a strong investment performance,” Gartmore added.
Newton also said that it had been aware since RBS’s acquisition of NatWest that its management of the fund “would change at some point” but also added it had been appointed to manage a global equities portfolio.
“We are very pleased to confirm our ongoing role as a investor of the actively managed equities of the Royal Bank of Scotland Group Pension Fund.”
“We look forward to delivering the performance RBS has come to expect from us,” Newton declared.
Hewitt Bacon & Woodrow was appointed as actuarial adviser while Watson Wyatt was retained as investment consultant. Merrill Lynch Investment Management acted as transition manager during the restructure, which has now been completed.