Stonegate Pubs has selected Kempen Capital Management UK for a new fiduciary management mandate for the group’s two pension schemes.
Stonegate Pubs – a pub company in the UK which owns brands such as Slug & Lettuce – offers two defined benefit pension schemes, Laurel Pub Pension Scheme and Yates Group Pension Scheme, and employs over 15,000 people.
The pension schemes appointed Kempen’s fiduciary management team following a tendering process which ran from January 2021 to April 2021, and was overseen by Anthony Webb and Aqib Merchant at Isio.
The new fiduciary mandate contributes to Kempen’s total client assets under management which stood at €88.3bn as at 30 June 2021.
Kempen will work with the schemes’ trustees to implement a collaborative investment strategy and work to achieve their funding objectives and journey to full funding, it said.
Andrew Campbell, chair of the trustee boards of both schemes and of BESTrustees, said: “During the formal tender process, Kempen demonstrated their understanding of what the trustees want to achieve and how their skills and expertise would help us deliver these objectives.”
He said the asset manager “stood out as being dynamic, having a real desire to work with us and being able to explain complex investment issues using plain language”.
DC market could allocate up to 40% to illiquids, says Hymans
Up to 40% of default assets could be allocated to illiquid investments by defined contribution (DC) schemes for younger members, improving their outcomes, according to analysis from Hymans Robertson in its Illiquid Investment for DC Schemes paper published today. Maximising the potential will require supportive legislation, regulation and guidance with the development of an investment strategy anchored to improving member outcomes, the report warned.
The paper challenges the familiar myths about illiquid investments, not least that investing is too hard and too expensive for many schemes. It also identifies opportunities including infrastructure, private equity and private credit which can be used at different stages of the savings path to drastically improve retirement outcomes for individual savers, it said.
Commenting on the findings in the paper, Callum Stewart, head of DC investment, at Hymans Robertson, said: “A commonly held belief that investing in the illiquid market is too complex and expensive could, however, be leading to caution and limiting the chance to improve outcomes for DC savers.”
He noted, however, that more should be done to recognise the opportunities that investing in illiquid assets can bring to DC schemes, with further evolution of the master trust authorisation rules requiring all master trusts to accept incoming transfers of illiquid assets needed to mitigate potential bulk transfer risks.
“Despite a somewhat negative perception around illiquid investments, the findings in our paper indicate that the highest conviction schemes could take full advantage and allocate up to 40% of default assets in illiquid investments in the earlier stages of the savings phase,” Stewart said.
“We would expect the norm for the majority of schemes to be around 20% and are already seeing examples of master trusts with allocations close to this level,” he added.
For master trusts Stewart would recommend that schemes should be required to accept incoming transfers of illiquid investments in order to maintain their authorisation.
“This option would remove some of the most extreme risks around liquidity, yet in tandem should increase comfort levels from schemes to invest in illiquid investments bolstering perception in the market,” he said.
Liontrust to acquire Majedie Asset Management
Asset management firm Liontrust Asset Management has agreed to acquire Majedie Asset Management for an initial consideration of £80m (€94m) – including regulatory capital – plus up to £40m for excess NAV and deferred consideration.
Majedie’s institutional fund management team will join Liontrust when the acquisition is completed in April 2022, it was announced.
On completion, the team will be renamed the Liontrust Global Fundamental team and continue to be headed by James de Uphaugh.
There will be no change to the team’s existing high conviction, tried and tested investment process that will continue to be applied to the management of Majedie’s current funds, portfolios and investment trust mandates, Liontrust said.
The Liontrust brand will be used for all Majedie’s UK, US, global and international equity funds.
“The proposed acquisition will significantly boost Liontrust’s existing institutional proposition and enable an acceleration in growth in this key segment of the market through increasing our scale, distribution and client base,” the firm said.
Rob Harris, chief executive officer of Majedie, will join Liontrust as head of global institutional business.