UK - Lincolnshire County Council's £826m pension fund is reducing its equity weighting by 10% in favour of fixed interest, private equity and property following completion of an asset liability study by Hymans Robertson.
Two UK equity core satellite portfolios are currently run by Deutsche Asset Management and Friends Ivory & Sime. The external managers run the satellite portion with the core managed in-house on an index-tracking basis.
Lincolnshire is increasing its exposure to property by 2.5% to 10% but a spokesman said the previous 7.5% allocation now effectively stands at 10% of the fund due to the recent relative outperformance of property.
Another 5% of the fund will be allocated to fixed interest, probably corporate bonds. Lincolnshire’s existing manager is Morley Fund Management.
Lincolnshire is also increasing its private equity exposure from 2.5% to 5% over the next three to five years and is looking specifically at fund-of-funds. It is not using a consultant in the process. The private equity increase is the only change that will result in a tender, the other increases in allocation being absorbed by current managers.
Lincolnshire employs four overseas equity managers: Invesco (US); Bank of Ireland has two briefs (Continental Europe and Far East ex-Japan); and Schroders (Japan).
In mid-July the fund will readjust its own customised benchmark. A spokesman for the fund said the changes will not be a “big bang” but will be implemented over 12-18 months. He added that the scheme will probably alter its weighting within equities by scaling down the UK and scaling up overseas.
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