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HSBC Pension Scheme awards mandate to independent asset manager

28 November 2014

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Fulcrum Asset Management this week announced it has been appointed to help manage HSBC's £20bn pension scheme.

The mandate will be managed under Fulcrum's multi-asset volatility strategy, which seeks to capture absolute returns for investors from volatility exposures across a range of asset types.

Mark Thompson, chief investment officer at HSBC Pensions Trust, said: "We see the multi-asset volatility strategy as an interesting and innovative addition to the return seeking element of the portfolio that also brings significant diversification benefits."

As well as its multi-asset investment approach Fulcrum, which is an independent asset manager with GBP 2bn of assets under management, has an absolute return focus and a low correlation to traditional asset classes.

It was these criteria specifically that led to the appointment, as they match the investment objectives of the GBP 20bn scheme.

Fulcrum chief executive office Andrew Stevens said: "We are delighted to have been appointed and look forward to building a successful partnership with the scheme trustees and Pensions Trust.

"This appointment reflects the continued interest in our alternative beta offering from institutional investors looking to diversify their portfolios and access new sources of returns," he added.

The appointment follows a move by HSBC in September to outsource GBP 1.8bn of its UK pension assets from HSBC Life, its in-house provider, to Fidelity Worldwide Investment.

At that time, the transition of HSBC's defined contribution pension plan is the largest of its kind in the UK and it followed the an announcement by HSBC Life in June that it was withdrawing from the workplace pensions saving market.

HSBC Life sold its UK third-party pensions business to ReAssure, part of Swiss Re.

The corporate and individual pensions policies and associated annuities book were valued at GBP 4.2bn (USD 7.05bn).

First published 27.11.2014