London Pensions Pooled Money, Now Need Managers to Invest It

The UK’s leading pension collaboration is hunting for global equity managers as it moves to the second phase of its plan to pool £25 billion ($36.4 billion) in public pension assets.

The London Collective Investment Vehicle (CIV), a collaborative venture among the UK capital’s 33 public pensions, last week launched its third sub-fund: an actively managed global equity mandate run by Baillie Gifford.

“Global equity remains the largest single asset allocation within London’s local authority pension funds.”It follows the launch of the CIV’s first pooled mandate last year, another global equity fund managed by Allianz Global Investors. In February, it launched a diversified growth fund under Baillie Gifford.

BlackRock and Legal & General Investment Management both run pooled passive global stock funds, completing “phase one” of the CIV’s offering. Investment Oversight Director Julian Pendock said he plans to search for more active strategies—including at least one with a dedicated environmental, social, and governance tilt—to join the CIV’s line-up.

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“This space—total global equity, including passive funds—remains the largest single asset allocation within London’s local authority pension funds,” the collective told its members. “We will offer a lineup of managers who have different styles and approaches, and we are seeking products which have a distinct philosophy and approach, and which have been consistently well executed. Company structure is a key consideration in order to ensure that interests are aligned with investors’.”

The lineup will include a combination of “core and satellite” strategies, the CIV said, from “large, traditional” managers and boutiques alike.

The phase two search will involve discussions with more managers that already run a significant amount of assets for several London pensions, the CIV added. “Further, the manager must offer commercially attractive terms, and material capacity for new investors is also highly desirable.”

In addition to the global equity search, the CIV has “provisionally agreed” terms for two multi-asset funds with Pyrford International, a subsidiary of the Bank of Montreal’s asset management business, and UK boutique Ruffer. Discussions are ongoing with a third manager—Newton Investment Management—for another multi-asset mandate.

The London CIV approaches £8 billion in assets as it seeks to pool common mandates among the pension funds it serves. Its efforts so far halved asset management costs in some areas, CEO Hugh Grover reported earlier this year.

All UK local authority pension funds must submit detailed proposals for pooling their investments to the government by July 15.

The London CIV has been shortlisted for a CIO Innovation Award for top public pension below €15 billion. The awards will be presented on June 2 at a ceremony in London—asset owners can request a place at the dinner and Influential Investors Forum.

Mark Brubaker, Wilshire ConsultingWilshire Consulting, the institutional advisory unit of Wilshire Associates, has named a veteran consultant to lead its outsourced-CIO (OCIO) practice.

Mark Brubaker, currently a managing director of Wilshire Associates, will take on his new position and responsibilities effective immediately.

Brubaker has led OCIO business growth and the appointment formalizes his role, according to the Santa Monica, California-based firm.

“Mark has been instrumental in building our team, structure, and procedures critical for effectively executing numerous aspects of managing an outsourced-CIO practice,” said Andrew Junkin, Wilshire Consulting’s president, in a statement.

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Wilshire had $6.43 billion in full discretionary assets under management and 10 clients as of January 2016, according to CIO’s 2016 OCIO buyer’s guide,

The firm enter the OCIO business in 2001, and has since built a team including 12 portfolio managers and 5 relationship managers.

Wilshire’s former Chief Investment Researcher Steven Foresti became CIO of the outsourcing business last June.

Foresti oversees strategic investment research and asset allocation modeling as well as translates research into “actionable recommendations” for clients.

“There are an increasing number of organizations seeking to better allocate resources by outsourcing many of the investment and administrative responsibilities traditionally shouldered by a CIO,” Brubaker said. “I look forward to leading Wilshire’s response to this market demand.”

The new OCIO practice chief has spent 19 years with Wilshire, largely as a consult to large corporate, endowment, and public funds out of the Pittsburgh office.

Brubaker also sits on Wilshire Consulting’s investment and manager research oversight committees.

Prior to Wilshire, he managed $9 billion in pension and foundation assets at Westinghouse Electric Corporation. He also worked in the investment management and trust division of PNC Financial.

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