Pension Protection Fund, London, will begin bringing some of its investment management in-house, spokeswoman Leonie Furman said in an e-mail.
The £20 billion ($31.1 billion) fund, which handles payments of defined benefit funds for insolvent U.K. companies, does not now do any internal management. Executives plan to begin internal management with its liability-driven investment hedging program.
The fund plans to begin moving about 25% of the LDI program in-house, starting immediately. The fund’s LDI managers are BlackRock, Insight Investment, F&C Asset Management and Legal & General Investment Management.
The fund is beginning with its LDI program because “we have experience in this area across the team, and having control of this element we believe gives us the biggest bang for our buck,” said a statement e-mailed by Ms. Furman.
Regarding future moves in-house, the statement said, “We will only insource the management of assets where we genuinely believe that this is to the benefit of levy payers and members. This is not the case for certain asset classes. For example, the management of our small emerging markets allocation is best served by a specialist fund manager.”
Ms. Furman did not provide further information on the size of LDI assets, internal staffing or how much of external managers’ portfolios would be reduced.