UK - The £315.5m Weir Group Pension & Life Assurance Scheme has appointed Gold-man Sachs Asset Management to run a £85m UK fixed interest mandate.
GSAM said it was being allowed to invest a proportion of the £85m mandate in a range of securities outside the UK fixed income universe. GSAM said the aim was to generate higher returns at a marginal increase in the overall portfolio risk.
As an example, GSAM will be able to invest in emerging market debt, high yield, currencies, overseas bonds, mortgage-backed and asset-backed securities, derivative instruments as well as the more traditional sectors – government and corporate bonds.
The Weir Group mandate targets a return of 1.25% net of fees above the benchmark over a rolling three-year period. The benchmark is a combination of the FTSE UK Gilts over 15 years and the Merrill Lynch Sterling Non-Gilts Index.
GSAM executive director Sally Marshall said: “Schemes are increasingly searching for ways to generate more return from their bond portfolios and are getting comfortable with taking more active management risk to do so.
“Our Active Alpha Investing approach seems to be hitting the spot. It aims to achieve greater returns within a risk budgeting framework, improving the overall risk/return ratio of the fund.”
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