The Pensions Trust, a UK multi-employer pension fund with £5.7 billion (€7 billion) of assets under management, has appointed BlackRock to build a £100 million portfolio of alternative investments and credit securities to help meet long-dated inflation-linked liabilities.
The Pensions Trust is looking to boost returns from alternative growth assets as bond yields fail to provide the protection investors need.
In 2011, the trust announced it would invest in new areas of potentially secure income like green bonds, infrastructure debt, real estate and renewable power.
David Adkins, chief investment officer for The Pensions Trust, says: “We have a duty to our members to diversify risks in the portfolio and to generate income with our assets that match the liabilities owed to members.”
He described alternative growth assets as “crucial” to this approach.
BlackRock will act as fiduciary manager, providing delegated investment services and reporting and managing both BlackRock assets and external investments for the trust.
The trust intends to grow its allocation to this area significantly beyond £100 million.
Andy Tunningley, head of strategic institutional clients at BlackRock, says building an illiquid, multi-alternatives strategy to provide long-dated, inflation-linked cashflows will help meet the trust’s objectives.
The Pensions Trust is a leading occupational pension fund for the charitable, social, education, voluntary and not-for-profit sectors. It has 2,400 employer organisations as members, covering over 170,000 employees and pensioners.
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