Over two-thirds (70%) of the lifeboat fund’s £12bn portfolio of assets are allocated to cash and bonds and the fund hopes appointing a larger panel of managers will give it the flexibility to access a broader range of bond strategies.
Martin Clarke, the PPF’s executive director of financial risk, said: ‘This announcement marks the next phase in the development of our strategy for managing our extensive fixed income investments.
The PPF has a 70% strategic allocation to cash and bonds and, as we grow, we are looking to develop an investment strategy that will enable us to source a broader range of fixed income investment opportunities, while staying true to our low-risk appetite.
Mr Clarke noted that the fund had already given greater asset allocation to cash to shorten the overall duration of the bond portfolio and would soon embark on a major transition to make use of the specialist strategies now represented on its enlarged panel.
In total, five firms were re-appointed to the panel, including: Mondrian Investment Partners Ltd; Goldman Sachs Asset Management International; PIMCO Europe Ltd; Rogge Global Partners PLC; and Wellington Management International Ltd.
A further 10 are new appointees: Alliance Bernstein Ltd; BlueBay Asset Management LLP; BlueCrest Capital Management (UK) LLP; Colchester Global Investors Ltd; Insight Investment Management (Global) Ltd; Investec Asset Management Ltd; Loomis Sayles, a subsidiary of NGAM UK Ltd; M&G Investment Management Ltd; Morgan Stanley Investment Management Ltd; and Stone Harbor Investment Partners LP.
Managers will be selected from the panel to invest with mandates in a range of fixed income sectors. The enlarged panel includes managers with expertise in absolute return strategies, asset-backed securities and emerging market debt as well as global sovereigns and corporate credit.
The appointments have been made for an initial four years with the potential for contracts to be extended for two further periods of up to two years.