Pension Insurance Corp. selected Wellington Management to subadvise a £700 million ($923 million) allocation to U.S. municipal bonds, a spokesman said Wednesday.
Wellington was selected because of its long and successful track record of relationships with insurance companies, excellence in research, and strong integration of environmental, social and governance considerations into its investment process, according to a news release Wednesday.
It is the first time PIC has chosen a third party to manage municipal bonds, which are used for long-term liability matching.
Municipal bonds have been a component of PIC's £47.7 billion portfolio since 2016 and the insurer expects that the allocation to these bonds will continue to grow over time.
"We are very pleased to have appointed Wellington, not only for their expertise in the U.S. muni bond market, but also for their ESG and climate risk expertise," Rob Groves, CIO at PIC, said in the release. "These are particular areas of focus for us and we will continue to develop our expertise in this area with help from our expert managers"