Lancashire scheme seeks passive equity managers
The Lancashire County Council Pension Fund is to move 10% of its assets to passively managed UK and global equities mandates, adding to the list of local government schemes disillusioned with active strategies.
According to council meeting minutes released today, the £3.6bn (€4.4bn) local government fund terminated a specialist UK equity mandate with Schroders and halved the amount Newton Investment Management managed in global equities last year due to 'very significant underperformance'.
The resulting £350m has been managed on a passive basis by L&G in the interim period.
Mark Bennet, principal accountant at the fund, said: "Although most of our managers have active strategies, we have a preference for passive management and have increased our allocation to it.
"There has been little evidence of outperformance in active management in some areas."
Schroders and Newton both declined to comment.
Lancashire's annual report for 2006/2007 showed the fund held 75% of its portfolio in active strategies.
In July, the Cambridgeshire, Falkirk and London Borough of Camden pension funds each switched multi-million pound mandates to passive strategies.
Bennet said the fund had also been investigating its first allocation to infrastructure. Council documents showed it would potentially invest in a fund of fund set up targeting between 3-5% of the overall portfolio.
The local government fund appointed Gottex to a hedge fund mandate worth £100m last year, following an investment strategy shake up.
--write to lpfeuti@efinancialnews.com
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