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Man FRM wins mandate to manage hedge fund allocation for Cornwall Pension Fund

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JLT Employee Benefits (JLT) has advised the GBP1.5 billion Cornwall Pension Fund on the appointment of Man FRM to manage its hedge fund allocation, which has a target size of 8% of the fund.

This results from an overall investment strategy review, which led JLT to undertake a full open market
procurement exercise with Cornwall Council.

The allocation will be managed via Man FRM’s Managed Accounts solution, which offers tailored solutions for LGPS Funds looking to invest into hedge funds, providing complete transparency and legal control of the assets, whilst also allowing all LGPS Funds to benefit from a sliding management fee scale based upon their collective assets.

Jignesh Sheth, Director, JLT Employee Benefits, says: “In our search, Man FRM were able to demonstrate a particularly high level of transparency of underlying investments, robust infrastructure and a bespoke investment approach tailored to the needs of the Cornwall Pension Fund in order to specifically complement the existing portfolio. Cornwall Council and JLT therefore concluded that Man FRM was the most capable advisor to support the Cornwall Pension Fund in setting up a customised vehicle for its hedge fund allocation.”

Matthew Trebilcock, Pension Investment Manager at the Cornwall Pension Fund, says: “We very much look forward to working closely with Man FRM and JLT to build a diversified hedge fund portfolio that will provide the best solution for the Cornwall Pension Fund as part of the overall investment strategy.

“Accessing the underlying hedge funds via Man FRM’s Managed Accounts not only provides our Fund with ownership of the hedge fund investments, but also allows for greater transparency of the underlying holdings. This feature is not always available through the traditional fund of funds offering and was a major consideration for us. In addition, the sliding management fee structure provides a real collaboration opportunity for all LGPS Funds in the hedge fund asset class.”

Luke Ellis, President of Man Group (of which FRM is a wholly owned subsidiary), says: “We are
delighted that the Cornwall Pension Fund and JLT have recognised the quality and value represented by the Man FRM proposal. We have long recognised that investors demand the highest standards in transparency, control and governance. Those critical factors are central to our managed account based portfolio design and construction developed over the last 15 years. 

“Additionally, we fully acknowledge the current pressure the LGPS Funds are under to achieve cost reductions and we have embraced this by treating the LGPS as a single investor with regards to pricing, but as quite different investors with regards to the eventual solution provided. Going forward, Cornwall and other LGPS Funds will see their costs of management fall as their collective assets grow, whilst each having their own customised hedge fund portfolios managed by a recognised pioneer in the field.”

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