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INVESTING/PORTFOLIO STRATEGIES

U.K.’s PPF looking to move more portfolios in-house as assets expected to grow

Pension Protection Fund, Croydon, England, expects assets it oversees to increase to about £32 billion ($40.8 billion) while insourcing additional portfolios in the next three years, the fund said in a strategy document published Thursday.

The £23.4 billion U.K. lifeboat fund will bring sections of its portfolio in-house, transferring private and public market credit portfolios over the next three years to the in-house management team.

The PPF strategy report said the insourcing process started in the last year with the liability-driven investment portfolio. In addition to the credit portfolio, the PPF will also assess the prospect of insourcing passive currency hedging. As a result of the process, the fund will decrease external manager fees to an average 0.43% from 0.54% currently, starting in 2019.

Alan Rubenstein, PPF CEO said in a news release Thursday: “Our operating environment contains many uncertainties. We have a good understanding of our risks and mitigate them where they are within our control. However, the future performance of the U.K. and global economies, and the volatile funding levels among the schemes we protect, pose particular risks. Nevertheless, we are confident that our funding strategy puts us in a good position to face the future.”

A spokeswoman was not available to provide additional details. The sizes of the portfolios being moved in-house could not be learned.