UK – The £865m (€1,407m) Yorkshire Electricity Group pension scheme has carried out a strategic asset allocation review that has led to the appointment of Schroders and Western Asset Management to run two new £280m (€455m) sterling fixed income mandates.
The appointments replace Foreign & Colonial and Deutsche Asset Management who both previously ran multi-asset equities and bonds portfolios worth some £364m each.
Bob Griffith, group administrator for the Leeds-based fund, says the change isn’t due to poor manager performance but the current position of the fund. “We undertook the strategic review because the scheme is fast maturing and we no longer need to take on as much risk, which we have reduced by increasing our fixed income weightings,” he comments. This is reflected in the fund’s new 75% fixed income/ 25% equity split. Previously this was a 55/45 split.
The new asset allocation policy sees Schroders and Western Asset Management each take on a £280m sterling fixed income mandate, comprising UK gilts, UK corporate bonds, sterling index-linked bonds and overseas bonds hedged to sterling.
Capital International will manage the group’s UK and overseas equity mandate worth £265m, having previously managed a specialist £97m overseas equity portfolio. Foreign & Colonial will continue to manage the remainder of the fund’s assets in an existing £40m real estate portfolio.
William M. Mercer advised the fund, which has 800 active members, 4,750 pensioners and 2,100 deferred pensioners, on the new strategy.