In the first part of our series looking at what firms did to win accolades at this year's UK Pensions Awards, PP speaks to LaSalle Investment Management UK chief investment officer Julian Agnew about how firm won the Alternative Investment Manager of the Year category.
Video: LaSalle Investment Management UK CIO Julian Agnew
PP: What does it mean to win this award?
JA: We're obviously delighted to win this award. It reflects the hard work of our UK platform in being ahead of the curve on alternatives through research, specialised teams and a loyal client base prepared to listen to new ideas.
PP: What do you believe sets you apart from your peers and contributes to this success?
JA: I believe there are three key things:
• Innovation: We constantly seek new and innovative ways of investing in real estate. This can take the form of mezzanine debt, inflation matching assets to club deals in specialist areas such as garden centres. The main point is being clear on your thought process and being able to illustrate prospective risks and rewards to your clients. In addition, we also work closely with our clients on a range of areas crucial to the management of their property exposure.
This could include identifying the appropriate benchmark, reducing or increasing property allocations, the allocation of assets into return seeking or matching asset groups or changing the risk profile to meet changing pension and sponsor needs. All clients have different objectives and it's essential that we have a bespoke strategy to meet their investment objectives.
• Trust: Trust for any manager is extremely important. We are extremely proud of the trust we have engendered with our clients - reflected by the 15-year average relationship. This trust means we jointly explore opportunities to enhance returns, and any issues are identified and addressed as soon as they arise.
• Performance: Trust and innovation are important, but you still have to deliver on IPD performance. We deliver value to our clients with a track record of outperforming in UK core/coreplus property mandates. Our IPD relative return mandates have outperformed IPD Pension Funds over 1, 3, 5, 10 and 20 year periods. In addition to this award two of the separate accounts under our management were awarded IPD/IPF property investment awards (Unlisted Balanced Fund Award and the Specialist Small Fund Award). These were both awarded on our outperformance against their peers in these respective categories.
PP: What are the key challenges facing your pension scheme clients and how are you helping them address these issues?
JA: The key challenge for our clients is how they meet their long term liabilities to their pensioners in an era of low returns when the pricing of the majority of asset classes looks challenging.
Property still looks attractive compared to the majority of other asset classes, but care needs to be taken at this stage in the cycle over certain sectors / locations. How we have helped our clients with their key challenges can be illustrated by:
• Being ahead of the market - we have consistently occupied a high ranking over the last five years for acquisition volumes and ensured our clients exceed their expectations for their property weighting.
• We have always incorporated long let index leases in our mandates. We started recommending separate index linked mandates to our clients in 2009 given their pricing relative to index linked gilts.
• Having bespoke strategies to meet clients' specific plans or returns which are different from the makeup of a typical IPD fund. Going forward, a good way to help clients to continue to meet their objectives is PRS (private rented sector). While very fashionable now, we have invested in the sector for over 15-years. Having the right team, management, strategy and being able to implement is key. I am confident we have the best of all three to help our clients.
PP: How will you continue to improve your services to Pension scheme clients over the coming 12 months?
JA: We are committed to improving performance for our pension fund clients through responding to their often dramatically changing individual needs, providing them with new and innovative ways of accessing real estate to stay ahead of the cycle in a continually evolving market.
Extract from LaSalle Investment Management's original UKPA submission
LaSalle Investment Management is focused solely on investing in real estate and its UK IPD benchmark relative return mandates have outperformed the IPD Pension Funds benchmark over a one, three, five, ten and 20-year period.
LaSalle's real estate research & strategy team plays an integral role in driving its investment management process and its forecasts of the property market are used for each client portfolio - ensuring strong conviction in underwriting and business planning.
In addition to this, LaSalle also has extensive on and-off-market deal sourcing capabilities, which enabled it to complete £1.8bn of acquisitions in the 12 months to October 2014.
The firm also has a record of value-adding implementation by its 41-strong, sector focused, in-house asset management team with 745 new/renegotiated leases, 268 rent reviews, 97 submitted planning applications and 120 refurbishments completed in 2014.
LaSalle also strongly believes in the long term value of integrating ESG into the investment process and this belief, along with demand from clients, has led to the embedding of a number of new initiatives into its processes.
The UK Pensions Awards 2015 Winners’ Series
- How LaSalle Investment Management won the Alternative Investment Manager of the Year award
- How LCP won the Risk Reduction Adviser of the Year award
- How LGT Capital Partners won the SRI / ESG Provider of the Year award
- How PIC won the Risk Reduction Provider of the Year award
- How Spence won the Consulting Innovation of the Year award
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.