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IPE special report May 2018

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USS long-term mandate shortlist announced

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UK – Three corporate entries have made it onto the shortlist of eight candidates in the Universities’ Superannuation Scheme’s long-term mandate competition.

The three corporate entries were from Schroder Investment Management, Henderson Global Investors and Nevada’s Sustainable Forest Systems.

The competition is to run a notional 30 billion-euro mandate for the long term.

Schroders’ offering put forward a technique it has adapted called "dynamic asset allocation for pension plans" or DAPPL. Henderson’s solution combined “radical elements” with pragmatism. And the Sustainable Forest Systems’ entry discussed the case for developing high-value tropical hardwood to meet pension fund liabilities.

The short-listing was done without knowledge of which category the entrants fell into. There were 88 entries in all.

The five individual or non-corporate entries included Australia’s Graeme Francis Bevans, and the UK’s Jonathan Heller, Paul Hodges, Damian Prentice and Peter Webster.

Francis Bevans discussed how to extend collaboration to allow pension funds influence over major global market players. Heller’s entry focused on the shared risks approach to private equity. Hodges reflected on "Influencing and supporting good management in small to medium sized companies".

Prentice sought to match asset cash flows to fund pension scheme liability cash flows while Webster asked how pension funds can take responsibility for influencing their peers and the supply chain.

All the entries can be found on the USS web site: www.usshq.co.uk. The winner of the competition will be announced on Wednesday October 15.

The ideas thrown up by the competition will be discussed at a seminar in Amsterdam organised by the European Pension Fund Investment Forum on October 28.

The competition was launched in February this year by a group of pension funds led by the UK’s Universities Superannuation Scheme and Canada’s Ontario Teachers Fund.

The competition’s seven-strong judging panel includes PGGM chairman Dick de Beus as well as Hewitt Bacon & Woodrow’s global investment consulting head Nick Fitzpatrick.

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