UK - The £18bn Universities Superannuation Scheme is reviewing its investments and considering a move to long-term mandates.
It is understood that the £445m Corporation of London Pension Fund has also tendered six long-term mandates.
Consultant Watson Wyatt believes the moves demonstrate that schemes, consultants and fund managers are increasingly accepting the long-term mandate investment philosophy.
USS senior adviser, responsible investment, Raj Thamotheram revealed that USS had assembled a project team to conduct an investment strategy review.
The team – which will be led by chief investment officer Peter Moon (pictured) – will make an initial report in March. The final report is expected to be completed within the next three to six months.
USS’s interest in the specialist briefs follows last October’s long-term mandate competition – launched in association with Hewitt Bacon & Woodrow.
Thamotheram said: “It’s all at a really early stage. But in response to the competition – which USS took very seriously – the board of directors have asked Peter Moon to undertake this project.
“We’re looking at all aspects – how our current investments are handled and how future investments will be handled.”
Thamotheram said USS and Hewitt would be working together on the development of long-term mandates.
He added: “We’re collaborating with Hewitt in its work on helping schemes grapple with this.
“We’re exploring how we can share our experience, but also learn from other schemes that are doing similar things.”
Meanwhile, Watson Wyatt – which is the Corporation of London Pension Fund’s consultant – said that its UK pension fund clients had awarded 11 10-year mandates since October 2003.
European head of investment consulting Nick Watts said: “As governance budgets have increased and risk is viewed more holistically across pension plan and sponsor, funds are committing their assets, both bonds and equities, to more innovative, longer-term products.”
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