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Cornwall Pension Fund hires manager for LDI mandate

17 January 2013

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Cornwall Pension Fund is the latest in what is currently only a handful of local authority pension funds to embrace LDI.

The fund, which according to data held by Pension Funds Online holds assets under management of approximately £1.2bn, closed a deal with AXA Investment Managers (AXA IM).

The mandate will see the firm manage a £50m for the scheme.

AXA IM will be working with the Cornwall Pension Fund to help them manage their key liabilities, in particular inflation risk and interest rate risk the pension fund is one of the first UK councils to adopt LDI investing in their strategy.

Matthew Trebilcock, deputy head of pensions and treasury at Cornwall Council, said: "We decided to incorporate an LDI solution within our overall investment strategy in order to reduce the impact of volatility on council tax payers and on long-term contribution rates.

"We are very much looking forward to working closely with AXA IM, utilising their expertise and experience in this space, in the implementation of our bespoke LDI solution."

Julian Brown, senior consultant at JLT Investment Consulting, commented: "While a large number of private pension funds have turned to LDI as a means of de-risking, to date we have only seen a small number of public sector funds adopting this practice.

"This approach should help the Cornwall Pension Fund to reduce funding volatility and thereby provide greater future security."