UK - The £16.8bn (€24.9bn) Barclays Bank UK Retirement Fund has awarded a £2bn multi-manager high alpha equity brief to Russell Investments.

Russell will design and manage the portfolio of third-party equity managers for the 220,000-member pension fund of the British bank.

Details of the fund's most recent asset allocation from September 2006 suggest 35% of the scheme's assets were invested in UK or overseas equities, 36% was held in bonds and 29% was invested in other asset classes.

A spokesman for Barclays said: "The fund's investment returns have outperformed its benchmark for each of the last four years."

In its interim results for the first half of 2007, the bank reported a £867m pension surplus for its main UK scheme compared to a £475m deficit at year-end 2006.

The bank noted the main reason behind the change in the funding position was "an increase in AA long-term corporate bond yields which resulted in a higher discount rate of 5.82%, up from 5.21% in December".

However, this was partly offset by an increase in the inflation assumption "and lower than expected returns on the assets". Barclays added "mortality assumptions remain unchanged from those in force at 31 December 2006".

This new mandate will initially combine a diversified range of 15 equity managers, using both global and regional mandates, as well as highly-concentrated portfolios, long-short strategies and differentiated fee arrangements, Russell Investments said in a statement.

The portfolio will be run by Neil Jenkins, a specialist in segregated multi-asset portfolio management and managing director at Russell's Investment Management & Research group.

As well as selecting managers, Russell will also be responsible for ongoing additional portfolio implementation matters such as cash equitisation, foreign exchange execution and transition management.

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