UK 鈥� A more than 拢600m (鈧�711m) reallocation of assets from equities to alternatives by the 拢25bn pension fund for the Royal Bank of Scotland Group has seen mandates by two asset managers terminated.
In its , covering the financial year to 31 March, the RBS Group Pension Fund said it reduced its equity investments to 拢8.6bn, increasing real estate and alternatives holdings, such as infrastructure.
It fund said it outperformed its strategic benchmark by 0.9 percentage points over the course of the year, returning 13.8%, and outperformed its three-year target by 1.3 percentage points, achieving a result of 12.2%,
It terminated a 拢377m global equity mandate held by Lazard Asset Management and a 拢238m mandate overseen by Davis Funds, while in its smaller, 拢766m section it invested 拢13m in infrastructure equities and 拢6m with Nephila Capital, a specialist manager investing in insurance-linked securities and reinsurance risk.
A more sizable infrastructure portfolio of 拢120m was also awarded by the main scheme to Hastings Funds Management, and Legal & General Investment Management (LGIM) 鈥� already responsible for more than 拢10bn of RBS Group Pension Fund鈥檚 assets 鈥� won a 拢17m forestry mandate.
LGIM also won a further 拢145m global credit mandate, doubling the size of credit investments while terminating the 拢82m mandate held by Standard Life.
The manager saw a liability hedging and cash mandate previously overseen my BlackRock split in two 鈥� between a 拢380m liability hedging and a 拢132m cash and liquidity portfolio.
In the report, the fund noted that its continued diversification into alternatives allowed 鈥渁 reduced concentration of risk in equities鈥�.
鈥淭he purpose of this diversification is to give the fund a more balanced portfolio, which should generate more consistent returns based on a broader range of assets,鈥� it said.
It also saw property investments increase by 拢200m to 拢1bn, largely granted to a 拢393m UK property mandate overseen by Standard Life.
