USS drops GSAM and LGIM
UK - The £22bn (€32.6bn) Universities Superannuation Scheme has dropped Goldman Sachs Asset Management (GSAM) and Legal & General Investment Management as external managers to take more assets in-house.
Under its high-alpha UK equity mandate GSAM only returned 7.1% between March 2004 and January 2005, compared to 12.1% for the benchmark index.
GSAM confirmed the poor performance and commented: "We took steps to address underperformance with the hire of Mark Beveridge, chief investment officer of non-US active equity, and William Howard, senior portfolio manager and co-director of research.
"GSAM is focused on enhancing our international active equity business under Mark's leadership. We are confident that over the long term Mark and the team will be able to deliver the performance in these portfolios that our clients and the market require."
LGIM had held a UK corporate bond mandate worth just over £1bn returning 5.8%, in line with the benchmark index.
Following USS' decision, 80% of its assets will be managed internally leaving only two external global equity mandates: Capital International and Wellington Management Co. each worth almost £2bn.
Another 1.2% of the USS' total portfolio is managed by Henderson Global Investors with a mandate to provide an enhanced return to that of the FTSE All-Share Index of UK equities.
GSAM and LGIM were hired by USS in March 2004 after it dropped Schroders, Baillie Gifford and Merrill Lynch Investment Managers.
This move had followed a decision to move away from balanced fund managers.
USS's investment strategy became the topic of heated debate in the financial press earlier this year.