UK - The £278m London Borough of Hounslow Pension Fund is awaiting the results of an actuarial valuation, the results of which are expected in Q2, with changes to investment arrangements possible.
According to a source at Hounslow, the study which is being conducted by Watson Wyatt, is likely to throw up any number of issues, including equity/bond ratios, and the possibility of specialist portfolios.
The local authority scheme employs Edinburgh Fund Managers and Merrill Lynch Investment Managers who have been with Hounslow for around 15 years. Currently both managers hold equally balanced mandates.
Both firms posted performance which was “below average” over the last year, taking into account market normal market cycles, according to the source.
A high percentage of equity investment is also another topic which may be thrown into the pot, added the source, with the valuation possibly concluding that higher bond exposure may be necessary.
Hounslow also said that asset classes such as corporate bonds, and hedge funds may also be on the agenda.
Hounslow holds approximately 49% in UK equities; 17% overseas equities; 10% UK bonds; 2% overseas bonds; just over 4% UK property; 5% in cash and deposits; 13% in unit trusts; and under 0.5% in venture capital and private equity.
By Madhu Kalia
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.