During the 12 months to the end of February, corporate pension funds appointed external managers to manage 30 fixed income mandates representing €3.6bn. On the other hand the 25 equity mandate wins registered during the same period only amounted to €1.5bn.
Topping our table is the BVP Pensionskassen, the Austrian multi-employer pension fund, which awarded 10 different mandates for a total value of €1.9bn back in June, before the scheme merged with VPK to create the €3.2bn VBV Pensionskasse, Austria’s largest corporate pension fund. The largest two mandates awarded by BVP were a €600m European fixed income brief picked up by Kepler, and an international equity brief for the same value given to Capital International.
In Italy, Fonchim, the industry-wide pension fund for workers in the chemical and pharmaceutical sector, gave away eight mandates worth €810m. In winning separate European fixed income mandates worth €165m each, Crédit Agricole Indosuez and Sanpaolo IMI Institutional Asset Management attracted more money than any other fund manager selected by the Italian pension scheme.
The interest among corporate pension funds for European fixed income is remarkably high. According to our data, there were a total of 12 mandates wins for this asset class, representing 40 per cent of the total fixed income mandate awards. On the equity side, however, global equity mandates were the most popular among corporate pension funds, representing 38 per cent of the total equity mandates given away to external managers.
The names of managers with strong track records in managing these particular asset classes appeared as winners of mandates coming from different pension funds. Capital International, for example, was selected to manage three global equity briefs and a global balanced mandate by three different pension funds – Austria’s BVP, Switzerland’s Beckam Coulter and Belgium’s General Motors Pensioenfonds – representing €744m.
It is also worth highlighting that corporate schemes are opting for following the multi-manager route when it comes to their investment strategy. Our research shows a total of 17 multi-manager mandates awarded since March last year with a total value of €856m. Frank Russell was the big winner in this category receiving a €421m multi-manager mandate from Australia’s News Limited pension fund, and a €162 one from UK’s InterContinental Hotels Common Investment Fund. This, added to a €33m global equity mandate from L’Oreal UK Retirements Benefits Plans, means Frank Russell attracted a total of €616m from corporate schemes.
Northern Trust Global Investments was also successful in securing pension briefs across asset classes, winning six mandates from six different pension funds in the US and the UK. The value of these briefs was €287m.
Although many mandate wins come from new mandates, the last 12 months have also seen the termination of some existing contracts. The Mothercare pension fund in the UK, for instance, replaced its three previous managers – Merrill Lynch, Société Générale and Legal & General – with three new ones – Artemis, NewSmith and UBS.
Balanced mandates continued to be a popular choice for the investment strategy of company schemes, with 15 new appointments totalling €754m. Some €2.1m of this was awarded by the Axa Sunlife Group Occupational Pension Fund in a single mandate. Hermes, the firm chosen by this UK scheme to look after its balanced portfolio, was also chosen by the BT Pension Scheme to manage a €700m hedge fund brief.
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