UK - The London Borough of Brent pension fund has appointed Mellon Capital to its new specialist currency mandate, in a step which has also seen the size of the brief increase from £5m to £28m.
Martin Spriggs, CIO of the pension fund, said the new manager required a larger fund invested in order to better control volatility.
On Mellon’s appointment, Spriggs said: “Members were impressed by their performance record, their approach - which was fairly simple to understand, and their control over volatility of results, which meant they had very consistent positive results over the last six years.”
The £400m pension fund decided to explore the potential for active gains in currency after attending seminars and reading articles on the subject.
“We felt we needed to manage our currency exposure better and it was an area where active management could make gains,” said Spriggs.
“We’re acutely aware of the Myner’s report advice that said you ought to consider a wider range of asset classes where you can make gains,” he added.
Asked if the council were considering further allocations to new asset classes in future, Spriggs said, “possibly, an obvious one for us would be global tactical asset allocation.”
At present the pension fund will concentrate on initiating the currency brief, which should be active before the year’s end.
The future management of a global equities brief worth £130m, currently managed by Bank of Ireland Asset Management (BIAM), is also under consideration.
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