Royal County of Berkshire Pension Fund, Maidenhead, England, returned 0.5% for its fiscal year ended March 31, with total assets growing 0.6% to £1.7 billion ($2.4 billion).
That compared with a 10.2% return for the fiscal year ended March 31, 2015.
On a real-return basis taking inflation into account, the fund returned -0.1% for the year ended March 31, compared with 10.3% for the year ended March 31, 2015.
However, the fund still managed to meet its medium term 4% real-return target, with a 4% annualized return over three years.
The fund’s latest annual report showed the main detractors from performance were a £170 million global developed markets equity fund run by Informed Portfolio Management, and allocations to emerging market equities and commodities. The fund added that Grosvenor Capital Management, which runs an absolute-return allocation, also fell short of its target. IPM was terminated earlier this year, with its assets allocated to existing global equity managers Kames Capital and RWC Partners.
The report said other asset allocation changes and strategy initiatives agreed by the Berkshire pension fund board included reducing exposure to Gresham Investment Management, which runs a commodities allocation, “with a view to redeeming completely in an orderly manner,” and “reducing by £100 million the current absolute-return portfolio advised by Grosvenor over the next 12 months.” The fund had £44 million invested with Gresham and £299 million with Grosvenor as of March 31.
Executives at the fund also plan to increase exposure to other private debt and private equity strategies, such as new emerging markets infrastructure, U.K. middle-market infrastructure, hedge fund secondary opportunities and other private markets opportunities in the U.K., such as private debt and technology.
Executives at the pension fund did not provide additional information by press time.