UK – The pension fund of brewer and pub operator Scottish & Newcastle says it is seeking “a little bit of alpha” by being among institutional investors that have committed 128 million pounds (199.4 million euros) to a new Barclays Global Investors bond fund.
BGI, Europe’s largest manager of pension fund assets with 146.1 billion euros under management, said in a news release that it has launched an actively-managed index-linked bond fund called the Ascent UK Real Return Bond Fund.
“The Scottish & Newcastle Pension Scheme and other institutional investors have already committed 128 million pounds to the fund,” it said. The scheme comprises four separate S&N funds which were consolidated in April this year.
Ray Martin, head of S&N’s head of pension and executive remuneration, said that S&N’s index funds were “doing nothing” and that “we wanted a chance of a little bit of alpha”, referring to market outperformance.
The new BGI fund aims to outperform the benchmark by 0.5% a year, net of fees, over three years. It is benchmarked to the FTSE UK Gilts Index-Linked over 5 years Index and is domiciled in Dublin. BGI manages more than 90 billion pounds (140.3 billion euros) in fixed income worldwide.
The fund is to be actively managed and will invest in UK and international government index-linked and corporate index linked bonds.
Martin added: “The Scottish & Newcastle trustees are looking for improved ways to manage and protect our members’ money. BGI has provided us with an innovative fund that will provide us with low risk incremental returns on index-linked assets while closer aligning our fund’s liabilities.”