Transport for London targets global equities with new mandates
UK - The £4.46bn (€5.2bn) Transport for London (TfL) pension fund has hired three global equity managers for mandates totalling £800m.
Following guidance from consultant Mercer, the public pension scheme appointed JO Hambro, IronBridge and THS Partners as part of its bid to repair some of the damage done during the market downturn.
IronBridge and THS will receive £300m each while JO Hambro has been awarded £100m. The fund said JO Hambro would receive a further £100m "once their assets under management had increased to a higher level".
The transport scheme already has overseas equity holdings including allocations to the Japan, the Pacific Basin, Europe and North America. However, until now there have been no specific global equity mandates.
The TfL trustees expect the "widely differing styles" offered by the three new global equity managers to bring diversification to the portfolio. IronBridge is a boutique value manager based in Illinois that employs a quantitative screening process, while JO Hambro in London favours qualitative stock research and claims to be neither a growth nor value manager. THS Partners, also based in London, describes its process as bottom up and non-benchmarked.
TfL used Legal & General Investment Management to oversee the transition to the new asset allocation.
Up to September 2009, TfL returned 13.1% against a benchmark of 13.6%, partly attributing the underperformance to negative returns from a bond mandate run by Goldman Sachs.
The fund was unavailable for comment at time of going to press.