SCOTLAND - The £180m Scottish Borders Council Superannuation Fund is eyeing specialist strategies in a move that could see the local authority fund tender its entire assets.
One of the moves up for discussion at the Roxburghshire-based fund is an increase in its exposure to global equities at the expense of its UK portfolio.
The shift is one of a several topics on the agenda following the completion of an asset liability study by William M Mercer. If Mercer’s preliminary findings are implemented, the Roxburghshire-based fund could tender its entire portfolio currently held by Phillips & Drew and Baillie Gifford, said head of financial administration, Alan Bowman.
Bowman added that there was likely to be a shift from UK equities into bonds and overseas equities, with the inclusion of a corporate bond element into the existing bond brief.
When pressed about whether specialist elements would be included into the overseas equities portfolio, Bowman added that the fund was still generally undecided about “how far to push the specialist boat out.”
Alternative investments, including private equity, are unlikely to feature in the new set-up - bucking a recent trend in local UK authority funds that has seen a marked rise in interest in PE, and some hedge funds.
Currently, P&D manages approximately £115m in global active and passive balanced briefs, and Baillie Gifford oversees around £85m on an active balanced basis.
The strategic allocation stands at 50% in UK equities; 22% overseas equities; 17% bonds; 5% to property, with remaining assets held in cash.
A final decision on the review is expected later this month.
By Madhu Kalia
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