UK - Concerns over returns have prompted the £1.7bn Staffordshire County Council Pension Fund to undertake a full review of its investment managers.
The move follows a “Best Value” study which the authority carried out at the end of last year. All local authorities are obliged by the government to conduct such reviews on service providers every three to five years.
Principal accountant Reg Smith revealed that concerns over charges for specialist mandates not necessarily matching returns, meant that the fund’s investment committee should carry out a further in-depth review.
Smith explained: “The review showed that the long-term annualised return, i.e. the 10-year return to the end of March 2000, was only slightly above the benchmark. The question was asked whether investing through a specialist active investment route, which we have been doing for several years now, has achieved its objective.
“It was also questioned whether the same return could be gained with a low-cost investment style.”
But Smith made it clear that this review by the investment committee, which is expected to last six to nine months, may not necessarily recommend any change to current fund managers or strategy.
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