UK - Gloucestershire County Council's £640m pension fund has awarded Hermes a £45m property unit trust brief.
The announcement comes just days after the fund appointed Standard Life Investments to manage a segregated specialist £130m UK equity portfolio and is part of a wider strategy review which has seen the fund move away from balanced mandates to a series of specialist appointments.
Announcing the move, Hermes said the fund had selected the Hermes Property Unit Trust (HPUT) for its entire property exposure.
As part of its strategy review, the fund has looked to consolidate its property investments, previously held through its legacy balanced managers in a series of property unit trusts, with one manager. Both single PUTs and fund of fund options were considered before selecting HPUT, Hermes said.
Bob Potter, director of finance at Gloucestershire County Council, said: “HPUT offers Gloucestershire an ideal diversified exposure to the UK commercial property market whilst Hermes track record as investment manager gives us confidence in their ability to deliver strong performance in the future.
“Furthermore, we have been attracted by HPUT as the lowest cost solution of all the large balanced property unit trusts and the broader market access it is able to achieve via co-investment with other Hermes clients.”
HPUT has net assets of £500m and offers balanced exposure to commercial and retail properties throughout the UK.
Fiona Sweeney, fund manager of HPUT, said: “Our active management approach following a core/satellite approach clearly focuses the team on achieving the optimum risk/return profile, whilst the opportunity for HPUT to co-invest alongside other Hermes clients such, as the BT Pension Scheme and Royal Mail Pension Plan, opens up investment opportunities not available to other large balanced property unit trusts.”
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