UK – The 450 million-pound (641 million euro) Shropshire County Council pension fund has appointed Goldman Sachs Asset Management to run a quantitative driven US enhanced index mandate – the first of its kind to be implemented by a UK local authority.
The mandate is for 49 million pounds (70 million euros) and the enhanced index product is designed to improve the risk return ration of a fund.
Says Sally Marshall, a senior member of the UK institutional business development team at GSAM: “Risk is kept to a minimum by staying close to the benchmark index, but returns are improved by taking small high confidence bets against it.” Enhanced indexing combines a large exposure to index trackers with a selection of traditional active managers.
Shropshire put the US equity mandate out to tender in February. The mandate was originally managed on an active basis until last September, when the fund parted company with the US equity portfolio manager. In the meantime it has been run on an indexed basis., but the scheme decided to return to an active management strategy.
GSAM’s US enhanced index product was launched 12 years ago. The quantitative equity team, led by Bob Jones, manages 18.5 billion pounds (26.3 billion euros) of assets, including 4.6 billion pounds (6.5 billion euros) for US enhanced large cap mandates.
GSAM manages 346 billion dollars (306 billion euros) in assets worldwide.