The £20bn (e33.1bn) industry-wide occupational retirement plan for 26 electricity companies, Electricity Supply Pension Scheme (ESPS), has reorganised some £2.1bn of its assets.
Merrill Lynch conducted the transition of the assets for eight of the electricity company pension funds to new investment managers.
“Until 1997 almost all ESPS assets were managed in-house, in a central unitised fund,” says Richard Barlow, chief executive of ESPS.
“The segregation facility introduced that year gives the trustees of participating groups within the ESPS the opportunity to appoint managers of their own choice, and has worked extremely well.”
F&C Management (previously Foreign & Colonial) has been given seven new portfolios, worth a total of £1.17bn, Barclays Global Investors received two portfolios worth £425m together, and Deutsche Asset Management won two briefs totalling £263m. Capital International was appointed to a £99m mandate, Legal & General obtained two briefs worth £92m in total, Nomura received a £55m portfolio and Wellington will handle a £29m brief for the scheme.
“Re-structuring arising from the introduction of segregation has now been completed, and our unitised investment management option remains available for property, forestry, cash and index-linked gilts, and also offers two balanced funds,” Barlow says.
“We are delighted that 25 fund managers are now involved in the ESPS, that F&C Management, who bought our former in-house manager, have retained a substantial role in the scheme, and that Merrill Lynch have done a first class job as transition manager,” he adds.
F&C now runs 27 portfolios, worth between £5bn and £6bn, Deutsche handles seven briefs worth around £2-3bn, and BGI is responsible for a similar amount of assets in four mandates on behalf of ESPS. Both JP Morgan Fleming and Fidelity each run five portfolios, with more than £1bn in each lot. Gartmore manages a single brief worth over £1bn.The rest of the fund’s assets are managed in 30 portfolios run by 19 managers.