11th Sep 2015 13:24
LONDON (Alliance News) - Legal & General Group PLC on Friday said its investment arm has won a mandate to manage GBP13 billion of pension assets for the National Grid UK Pension Scheme, with the company acquiring the scheme's in-house manager in the process.
The acquisition of Aerion Fund Management, for which no financial details were disclosed, was made as part of the long-term strategic partnership that will see Legal & General Investment Management - one of Europe's largest institutional asset managers - manage mandates for the scheme in fixed income, liability-driven investment, and equity asset classes.
The GBP13 billion of assets to be managed by Legal & General equate to 75% of the scheme's total, with the remainder manager by external asset managers.
Nigel Stapleton, the chairman of the scheme trustee board, said the decision to move away from managing its assets in-house had been a difficult one for the trustees. He said the "increasing maturity of the scheme" and "evolution to our investment strategy" meant it was a "carefully considered decision that we could not avoid making".
"Now we look forward to a long and successful strategic relationship with LGIM. In terms of its culture, key competencies and the commercial terms offered to us, the Trustees believe that LGIM can serve our future needs extremely well. These new investment governance arrangements do, therefore, provide an effective and robust model, operating in the best interests for our members," Stapleton said in a statement.
Mark Zinkula, the chief executive of Legal & General Investment Management, said the partnership was the best move for the scheme.
"LGIM is well positioned to manage the many different investment strategies, not only for the scheme's needs today, but also as the Scheme?s asset management requirements change over time," Zinkula said in a statement.
In parallel with partnering with Legal & General Investment Management, the scheme is to create a small executive office of pension and
investment specialists to support the trustees in the management of the total GBP17 billion portfolio of scheme assets.
LGIM will be providing "total portfolio solutions" to the trustees through the executive office.
The group said it expects the deal to complete by the end of the year.
Shares in Legal & General Group were down 0.8% to 252.70 pence on Friday afternoon.
By Sam Unsted; [email protected]; @SamUAtAlliance and Samuel Agini; [email protected]; @samuelagini
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