(Updates with information about benchmark and consultant)
Brunel Pension Partnership, the £30bn (€34.9bn) UK pension pool, has appointed Wellington Management, Investec Asset Management and boutique firm Genesis Investment Management to run an emerging markets equities sub-fund.
“We wanted evidence of the integration of environmental, social and governance considerations throughout each managers’ investment process”
The fund is now live, with £1bn already transitioned from Brunel’s Local Government Pension Scheme (LGPS) clients and there’s an expectation the fund will grow to around £1.2bn by year-end.
Brunel said it received interest from more than 160 strategies and narrowed these down to three managers that are “best placed to achieve the results our clients are seeking”.
“Our selection process focused on managers who have a clear approach they stick to and who were able to demonstrate a high level of skill across the broad emerging markets. We also sought managers with diverse approaches, which minimises the likelihood they’ll underperform at the same time,” said David Cox, Brunel’s Head of Listed Market Investments, in a statement.Brunel says Genesis, an affiliate of NYSE-listed AMG, uses a fundamental approach that focuses on high quality business at attractive prices while Wellington adopts a research-driven process. Investec utilises a combination of a four-factor screen and deep fundamental analysis.
A key factor was the integration of responsible Investment. Cox said: “We wanted evidence of the integration of environmental, social and governance considerations throughout each managers’ investment process, and a willingness to develop in this area.
“As with all our portfolios, it’s important that we’re investing for a world worth living in.”
Brunel said the benchmark is the MSCI Emerging Markets Index (Total Return Gross of Dividends). Asked if a consultant used in the selection process, Brunel said: “The process was led by Brunel, with investment consultants at Redington and AM Varde providing constructive challenge during the process. Inalytics were also used as part of the manager analysis.”
Brunel is one of eight national Local Government Pension Scheme (LGPS) pools, managing assets for the pension funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Environment Agency, Gloucestershire, Oxfordshire, Somerset and Wiltshire.
In September Brunel launched a call for expressions of interest for its Sustainable Equities offering.
Last month RI reported that Brunel was now able to monitor the real-time ESG performance of its portfolio managers by using artificial intelligence to analyse alternative and unstructured data sources.
Brunel appointed AI firm TruValue Labs in May this year to evaluate ESG and reputational risks across its portfolios, in both listed equities and fixed income.