The defined benefit pension scheme for the Wates Group, a UK construction company, has awarded a £300m (€353.4m) fiduciary management mandate to Russell Investments.
The group, which employs approximately 3,700 people, ran the competitive tender exercise through IC Select.
With more than 40 years of fiduciary management experience, Russell Investments will be responsible for developing and implementing an investment strategy with a focus on “generating income and managing investment risk” to ensure the scheme meets its long-term liabilities, it said.
In addition to investing in listed securities, the pension fund will also use Russell Investments’ specialist expertise to gain access to private market investments, including private debt investments where future cashflows can be used to help meet its future liabilities.
Martine Trouard-Riolle, chair of the trustees and professional trustee at Capital Cranfield, said that following the tender exercise IC Select helped the scheme prioritise what was important for the trustee board.
“Russell Investments quickly developed a strong understanding of our circumstances and proposed and implemented a portfolio which was aligned with our investment objectives,” she said.
In a statement, Russell Investments said that demand for fiduciary management solutions is strong as institutional asset owners recognise the benefits of access to best-in-class strategic advice and implementation to meet their long-term goals.
According to a recent study conducted by consultancy Isio, assets in UK outsourced investment solutions reached £200bn in 2020, an increase of 15% over the prior year.
Russell Investments currently manages over £83bn in fiduciary mandates globally with a 70-strong fiduciary management team in London.
The asset manager recently won a £1.5bn fiduciary mandate from Capita Pension & Life Assurance Scheme.
“Given the current market environment, generating income whilst managing interest rate and inflation risk are key concerns for pension scheme trustees,” said Jim Leggate, managing director and head of UK institutional, Middle East & Africa, at Russell Investments.
He added that his team will “dynamically manage the Wates Pension Fund’s investment portfolio to deliver a tailored investment solution that aligns with the evolving needs of the fund and progressively provides increased financial security for its members”.