Brunel Pension Partnership, Bristol, England, hired four managers to run a £1.2 billion ($1.6 billion) diversifying returns subfund, a spokesman confirmed.
William Blair, Lombard Odier Investment Managers and J.P. Morgan Asset Management will run similar allocations in terms of size, with UBS Asset Management running a smaller investment, the spokesman said.
The new diversifying returns subfund was launched by the local government pension scheme pool in response to requirements set by its 10 member pension funds. The LGPS funds asked Brunel to create a portfolio that offered "meaningfully different exposures to others in their strategic asset allocations," a news release said.
The fund is designed to act as a stabilizer when returns in other portfolios are under pressure.
"The DRF is proof that client needs can drive product innovation," said David Cox, head of listed markets at Brunel, in the news release. "Although protection was the priority, the fund also needed to provide returns strong enough to meet future liabilities, whilst offering liquidity. By targeting client outcomes in this way, we have ended up developing a more tailored product outcome."
Brunel said 102 managers submitted RFPs, 16 took part in a formalized tender process and eight managers made it through to final-stage interviews.
The portfolio has been funded from member pension fund assets and/or cash, the spokesman said.
Brunel's member funds have about £30 billion in assets.