Suffolk Pension Fund (SPF), the pension provider for 55,600 local government employees in the East Anglian county of Suffolk, has reported a 0.7% return for the year to 31 March on its £2.2bn (€2.8bn) portfolio, compared with 14.6% for the previous year.
However, SPF said its most recent return was 0.5% higher than the average achieved by other local authority funds.
SPF’s annualised return is now 7% for the three years, and 7.3% for the five years, to the same date.
SPF invests exclusively in pooled funds.
At 31 March, 50.5% of the portfolio was invested in equities (17.5% in the UK and 33% overseas), with 19.9% in fixed income (primarily global bonds).
Property made up 11%, while 17.3% was in other alternatives, primarily absolute return (9.5%), private equity (3%) and infrastructure (2.4%).
An interim valuation showed that the funding level at March was 78.5% and the actuarial deficit at that date £592m.
In other news, BMW Group is proposing to close its two UK defined benefit (DB) pension schemes to future accrual from 1 June 2017 and to have staff join the company’s defined contribution (DC) scheme instead.
The closure of the DB scheme would affect some 5,000 staff across all the company’s UK operations.
BMW has launched a consultation on its proposal.
Trade union Unite has said it will fight the plans “tooth-and-claw”.
A spokeswoman for BMW said the cost and risk associated with DB schemes were making them increasingly unsustainable and unaffordable for members and companies like BMW.
“BMW Group has always prided itself in providing excellent pensions for its staff and wants to act now to protect future pension provision for all its staff and to help protect the cost competitiveness of the UK as a manufacturing base,” she said.
BMW’s DC scheme was launched in early 2014 and has more than 2,000 members.
Meanwhile, Edinburgh-based investment management company Cameron Hume has teamed up with firms in Australia and Sweden as part of a plan to expand to the institutional business in new areas.
The Scottish firm has signed distribution agreements with AFM Investment Partners in Melbourne, and Nordicus Capital, which covers the Nordic region from Stockholm.
The partner companies will be responsible for identifying opportunities for Cameron Hume to work with institutional clients, including pension funds, sovereign wealth funds and insurance companies.
Cameron Hume specialises in fixed income investments for large, sophisticated institutional clients, managing $600m (€535m) on behalf of Sanlam, a South African insurer.
Lastly, Pemberton has launched a UK mid-market direct lending strategy, aiming to raise £500m for a sterling-denominated fund that will invest in dynamic mid-sized UK businesses.
The asset management group said the new fund was anchored by two leading institutional investors, naming Legal & General Capital (LGC) as one, and will allow investors with long-term capital to take advantage of the financing gap created by banks’ withdrawal from new corporate lending.
It expects a first close before the end of the year.
John Doyle, head of origination UK at Pemberton, said its origination team had sourced more than 100 opportunities in the past 12 months “and, importantly, the UK’s decision to leave the European Union has not impacted this appetite”.
The UK mid-market debt fund is Pemberton’s second, coming on top of one with a pan-European focus.