PPF recruits six GTAA managers
UK - The Pension Protection Fund has recruited six global tactical asset allocation managers as part of its statement of investment principles announced earlier in the year.
The lifeboat fund has immediately appointed Cantab Capital and Winton Capital, while Aspect Capital, Bluecrest Capital, DB Advisors and Neuberger Berman have been appointed on a deferred basis.
PPF chief investment officer Ian McKinlay (pictured) said: "We looked at the drivers of return and the numbers from the past and through the last three years they provided good diversifying characteristics. We think that they are the best in the market."
McKinlay said he was "pretty happy with the two at the moment" but said if PPF grows it would make sense to diversify across more managers, or if something happened to make it lose confidence in one of the managers, that would precipitate action.
He said GTAA provides a given return but diversifies against other assets because the return drivers are very different from those for its other assets.
The GTAA managers will form part of the alternatives portfolio within the PPF's asset allocation. It is currently about 20% in alternatives, 7% in real estate and is moving forward with seeding its private equity portfolio.
It also has a tender out for infrastructure at the moment.
McKinlay said the PPF lifted the return from 1.4% to 1.8% over LIBOR by bringing in diversified assets like GTAA and by using the risk freed up to generate more return.
In March, the PPF released its statement of investment principles which it said looked to diversify assets to gain better returns while maintaining the same level of risk (PP Online March 10).
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