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Impact Investing

IPE special report May 2018

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UK fund allocates £112m into multinational equity

UK - The £330m (e527m) Southern Water Pension Schemes has split its assets into three mandates to get a wider exposure to overseas equity. Deutsche Asset Management, Dresdner RCM Global Investors and Legal & General Investment Management have all been given portfolios worth roughly £110m. The previous manager for the whole fund was Jupiter Asset Management.

“ We’re changing our strategy so that we’ll have more overseas investment. With Jupiter we invested predominantly in the UK. This is an opportunity to have three specialist managers instead of just one,” says Stuart Steven, manager for the fund.

Dresdner’s £112m mandate specialises in multinational equities. “ Over the course of this year we have seen an increasing number of pension fund trustees looking at multinational benchmarks for the diversity of risk and uplift of return that domestic equities alone cannot provide,” says Mark Archer, head of institutional business development at Dresdner.

Formerly, the scheme had about 60% of its assets in UK equities, but now this exposure has been dropped to a third, with Deutsche managing the domestic stock brief, as well as a small bond portfolio, according to the pension fund. Legal & General was awarded an overseas equity brief and another small bond brief.

The pension scheme consulted Bacon & Woodrow on its change of investment strategy.

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