PiRho Investment Consulting chose BlackRock, Legal & General Investment Management and MN to provide fiduciary management services as part of its new offering for small- and medium-sized pension funds, said Des Hogan, investment consultant at PiRho.
Agreements on underlying funds, fees, contractual terms and reporting standards were made between PiRho and the three managers in advance, so pension funds will not be charged for manager selection if they choose this route to fiduciary management.
Mr. Hogan said the firm selected the three managers following a search that began 12 months ago; 10 providers were considered. The list for this specific offering will not feature more than three managers, but can change if PiRho executives think it is necessary.
Under the new service, PiRho will be the independent investment consultant for pension funds, while the fiduciary managers — whichever of the three is selected by the pension fund — will be responsible for implementing the investment strategy. PiRho will also be the main point of contact between the pension fund’s actuary and the fiduciary managers.
“The client will be offered a choice of manager A, B or C, and depending on the subjective nature of the trustee board, they decide who is most appropriate for them,” Mr. Hogan said. “We think the managers that we have chosen are sufficiently different to offer choice.”
Mr. Hogan said the target pension funds for the service have between £25 million ($40.4 million) and £250 million in assets.
PiRho, which launched in 2008, has provided customized advice on more than £20 billion of assets for pension funds, insurance companies, endowments and other firms.