More than three-quarters of the assets of the National Grid U.K. Pension Scheme, London, will be managed by Legal & General Investment Management, which is acquiring National Grid's in-house money manager, Aerion Fund Management.
As part of a long-term strategic partnership, £13 billion ($19.7 billion) of assets will be transferred to LGIM, as it acquires 100% of the share capital of Aerion, said a joint statement from National Grid and LGIM Friday. The transaction is expected to be completed before the end of this year. Terms of the transaction could not be learned by press time.
LGIM will manage the assets across fixed income, liability-driven investing and equity allocations.
The pension fund has £17 billion in total assets. An executive office is being created by the pension fund, which will be responsible for the oversight of the management of the entire portfolio. It will be led by Rob Schreur, starting Nov. 1. Mr. Schreur is currently chief investment officer of Philips Pensioenfonds, Eindhoven, Netherlands, which has €17.8 billion ($19.8 billion) of assets.
“Moving away from in-house asset management has been a difficult strategic decision for the trustees,” said Nigel Stapleton, chairman of the pension fund trustee board, in the statement. “However, the increasing maturity of the scheme and evolution to our investment strategy meant it was a carefully considered decision that we could not avoid making. Now we look forward to a long and successful strategic relationship with LGIM.”
The pension fund trustees will be able to withdraw assets from the core portfolio, to make benefit payments and to invest in active equity strategies, and may also transfer in assets from portfolios that are now run by other third-party money managers, said the statement.
Fenchurch Advisory Partners provided financial advice to the National Grid U.K. Pension Scheme on the sale of Aerion Fund Management.
A spokeswoman for National Grid was not available to comment by press time.
