UK - Hermes, the British Telecom (BT) in-house pension find manager, has moved to quash media reports that it is about to move 10% of its asset allocation into alternative investments, such as private equity and hedge funds.
Apart from the BT mandate, which has £30bn in assets, Hermes has around 200 other clients including other pension funds, insurance companies and charities. The BT pension fund is currently running a deficit of £4.7bn.
Charlie Metcalfe (pictured), head of business development and deputy CEO at Hermes, said that reports of a significant shift into alternatives were exaggerated: “We already have a 12% allocation to property, which some people class as alternative. We also have £1bn invested in private equity, as well as 2% in hedge funds. It all depends what you call alternative, its like asking how long a piece of string is.”
He admitted that the fund was looking at different strategies, “we don’t just want to lock in the deficit,” he said.
Metcalfe said that when exploring alternative strategies Hermes would manage a process whereby it could find external managers which were experts in a given field.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers