UK - The £500m Corus Engineering Steel Pension Scheme has dropped its third-party fund managers in favour of British Steel Pension Scheme's in-house team.
Sources say Corus has finished transferring its assets, which were previously managed by Deutsche Asset Management and Schroder Investment Management, to the British Steel’s team.
The sources say that while both DeAM and Schroders had good performance relative to their benchmarks, the Corus trustees wanted a closer relationship with their managers.
British Steel’s in-house team now manages £8bn in pension fund assets and one source – who declined to be named – said that unlike external fund managers, internal investment teams were entirely focused on meeting trustees’ needs. This, he said, fostered a closer relationship between the scheme, fund manager and actuary.
He added: “This makes the case for the in-house integrated approach. It reinforces the message that trustees are happy with fund managers that help them, that talk about liabilities and asset allocation, rather than somebody who comes in and just talks and talks.”
BT Pension Scheme trustee Bill McClory agreed. The scheme owns Hermes Pensions Management and McClory said: “The benefit of having an in-house investment team is that you have a closer relationship with the fund managers and can better understand what they are doing.
“If you have your own in-house investment manager there appears to be a greater commitment to the people who they are working for. With investment managers working for a separate company, there is not the same level of contact.”
The Corus scheme currently allocates 48% of its assets to UK equities, 16% to overseas equities, UK fixed income 7%, index linked gilts 24%, property 4% and cash 1%. It is advised by Mercer Investment Consulting.
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