The £19bn (E28bn) Universities Superannuation Scheme in the UK has appointed Wellington, Goldman Sachs and Legal & General and dropped Schroders, Baillie Gifford and Merrill Lynch. The total value of the assets awarded is £3.8bn.
“This follows a review of investment strategy and a decision to move away from balanced fund managers,” the scheme says.
“As a result, three current external managers, Schroders, Baillie Gifford and Merrill Lynch Investment Managers are no longer included in the external roster of managers.” USS says its portfolio reorganisation is complete.
Wellington Management, Goldman Sachs Asset Management and Legal & General Investment Management would run global equities, UK equities and active bonds respectively.
The Wellington mandate is worth £1.9bn, while Goldman and L&G will each run £950m pounds, says the scheme’s chief investment officer Peter Moon. The rejig was part of the scheme’s five-yearly review.
He added the scheme had used a transition manager, which he declined to name. Custody for the external assets remains with State Street.
USS manages 70% of its assets in house and now has a total of five external fund managers instead of the previous three.
“We have enjoyed a long and successful relationship with USS and are naturally disappointed that the relationship is ending,” says Baillie Gifford partner Nigel Morecroft.
“We are pleased to note, however, that they had no issues with Baillie Gifford regarding investment performance or service levels.
Schroders spokesman Julian Samways says that the revenue impact on the company was considerably less than the size of assets would imply as the balanced business operates on a lower margin than the specialist. He declined to disclose the amount of assets lost.
MLIM declined to comment.