UK - The £6.7bn Imperial Chemical Industries (ICI) Pension Fund has appointed Muzinich to manage a £60m global high yield bond mandate.
And the £250m Imperial Chemical Industries ICI Speciality Chemical Pension Fund has given Muzinich a further brief to run £10m in high yield bonds.
The investments will form the seed funding for Muzinich’s newly launched transatlantic yield fund, a Dublin-based UCITS fund, which has been recognised for UK distribution by the Financial Services Authority.
A spokesman for the ICI pension funds said: “We have decided to invest in high yield bonds for their diversification benefits as much as their attractive expected returns.
“Most of the money for this investment has come from US equities, as we believe that this is an efficient way of maintaining returns while reducing exposure to equity markets that are increasingly correlated with one another.”
Muzinich head of institutional marketing Francis Paxton: “We have seen a significant number of UK pension funds investing into the high yield asset class in the last 12 months, attracted by strong returns combined with the low volatility and lack of correlation with both equities and government bonds.”
Watson Wyatt advised the trustees of both funds.
Muzinich manages over £200m for six UK pension schemes including BUPA, P&O, Syngenta and Midland Independent Newspapers – part of Trinity Mirror.
This follows ICI’s pension schemes appointment of Ashmore Investment Management to run two emerging market debt mandates worth £70m.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.