UK - The £1.5bn GM Investment Trustees plan to create a new corporate bond investment vehicle.
Luton-based GMIT – which multi-manages pooled vehicles for five Vauxhall Motors pension schemes and four other pension funds – has identified a significant demand for corporate bonds in its pensions and is responding to client needs by matching assets to liabilities. GMIT chief executive officer Susan Flynn said: “We are currently in the process designing a model for the inclusion of corporate bonds in our mandate due to the demand presented by our clients.”
Flynn said speculation that GMIT was planning to boost its private equity allocation was “not true”.
She added: “There has not been a significant demand presented by our clients. The timing depends on the level of interest from our various schemes.”The exact size and value of the mandate has not been finalised and whether management is up for tender is not clear.
The fund currently allocates 27% to UK equities, 30% to international equities, 30% to fixed income, 12% to property and 1% to cash.
The fund has been discussing the corporate bond plan with a range of managers but specific schemes are yet be decided.
The current investment managers of the various pooled vehicles are Fischer Francis Trees & Watt, Deutsche Asset Management, Phillips & Drew, Gartmore Investment Management, Goldman Sachs and Schroder Investment Management.
The corporate bond move will be implemented in the next three to six months.
Frank Russell is advising the pension fund.
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