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Impact Investing

IPE special report May 2018

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Swiss managers lose out at Dorset

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UK – Swiss investment managers have lost out on managing assets worth roughly £59m (€85m) following a recent investment review by the £1.2bn Dorset County Council Pension Scheme.

UBS Global Asset Managers was axed from an £11m mandate following a move from UK passive small cap to active – Schroders was appointed the replacement.

Meanwhile, the scheme’s decision to appoint eight new investment managers – managing 15% of scheme assets – resulted in a 4% or £48m cut to Pictet Asset Management’s £398m portfolio. The £48m was used to fund two new UK active mandates.

Pictet is Dorset’s largest asset manager, and currently manages £350m for the scheme. Prudential M&G, managing £220m and ING Real Estate, managing £130m, are also among the largest managers.

The remaining mandates – amounting to £182m in total - were funded from cash and a reduction of in-house management by £80 to £250m. The scheme told IPE that the in-house cuts resulted in no staff departures or management shake-ups.

The new investment managers include three new UK equity managers (Framlington, Standard Life and JP Morgan) each managing £26m; two US equity managers (Janus and SGAM) each managing £24m; one UK small cap manager (Schroders) managing £11 million; and two private equity fund of funds managers (Harbourvest and Standard Life) managing £30m and £15m respectively.

The £45m move into private equity is a first for the scheme, and amounts to 4% of total fund assets. According to the scheme spokesperson, “potential added performance over public equity markets” was behind the shift.

The scheme also invests 6% in fund of hedge funds, and 10% in real estate. The remainder of the investment portfolio includes a 30% allocation to UK equities, 27.5% to overseas equities, 20% to global bonds and 2.5% in cash.

bfinance and EPIC Investment Consulting’s Alan Saunders were advisers in the tendering and selection process, which started in September 2005 and ended in January 2006. According to a scheme spokesperson, 19 investment managers made the shortlist before the final eight were selected.

The scheme hoped investment would be possible from April 1. “We are working 24-7 to deliver,” said the scheme.

The Dorset County Pension Fund provides pensions for over 40,000 public sector employees in the southern English county.

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