UK - Schroders has been dropped by the £2bn Cheshire County Council pension fund from managing £550m in equity and bond briefs.
The pension fund has re-allocated a £450m balanced equity mandate managed by Schroders between GMO UK and Standard Life Investments, and a £100m Schroders bond mandate between existing managers Legal & General and Baillie Gifford.
The changes resulted from a review in which it decided to use the money from Schroders’ original multi asset mandate to strategically re-allocate pension fund assets.
A fund official said: “We decided we wanted higher performing managers in global and UK, and then moved the bonds to our existing managers.
“It is not a direct reflection of Schroders. We didn’t set out to terminate that mandate. It is almost coincidence that their mandate was dismantled as a part of this.”
Standard Life and GMO were awarded equity mandates each worth £225m, together representing 22% of the fund’s total assets. Standard Life will run a segregated high alpha UK equity brief, while GMO will manage a global equity brief.
Existing managers L&G and Baille Gifford each had their bond portfolios increased by £50m, a 50/50 re-allocation of Schroders’ £100m bond portfolio, as part of the same re-structure.
All the equities were originally in balanced mandates split between Baillie Gifford, L&G and Schroders.
The consultant was Hymans Robertson.
The pension fund now allocates 35% to UK equities, 32% to overseas equities, 14% to bonds, 9% property, 5% private equity, 3% global tactical asset allocation, and 2% to cash.
A separate fund official said: “We felt that we needed our assets to work harder to keep pace with our liabilities. We’ve added GTAA in the last 12 months so we are trying to diversify our risk, but also secure the potential for returns to keep pace with our liabilities.”
Schroders was unavailable for comment at the time of going to press.
Standard Life now manages more than £2.5bn of UK local authority mandates including Somerset County Council, £175m, Leicestershire County Council, £150m, the London Borough of Havering, £80m, Staffordshire County Council, £200m and Buckinghamshire County Council, £76m.
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