UK - The Pension Protection Fund (PPF) has appointed five new fund managers and announced its investment returns are "likely" to match its levy income within five years' time.
State Street Global Advisors and Lazard Asset Management have been appointed to manage UK equities mandates representing 12.5% of the total fund’s value. Newton Investment Management has been appointed to manage a global equities mandate representing 7.5% of the fund. Morley Fund Management has been appointed to manage a property mandate representing 7.5% of the fund and Auriel Capital Management has been appointed to manage a currency mandate representing 2.5% of the fund’s value.
Some 80 fund managers responded to the PPF’s tender notice for manager services, published in the Official Journal of the European Union in November 2006.
Commenting after what he described as a “long and exhaustive process”, PPF chief executive Partha Dasgupta said: “As our assets grow, the contribution of our investment returns to funding the PPF become more significant. These appointments will be crucial in maximising those returns while helping build a solid balance sheet for the PPF.”
The PPF also announced it had arranged an interest rate and inflation ‘swap hedge’ with one of its existing fixed income managers, Insight Invesrment.
Following the appointments, the asset allocation of the PPF’s portfolio, which is set to grow to more than £5bn by 2009, is as follows: 20% cash; 50% global bonds; 12.5% UK equities; 7.5% global equities; 7.5% property; and 2.5% currency overlay.
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