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Man Group wins Clwyd Pension Fund mandate

06 November 2015

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British hedge fund Man Group has been appointed by the £1.4bn Clwyd Pension Fund to manage its hedge fund investments.

The pension fund has 9% of its assets allocated to hedge funds and managed futures, which would be around GBP 126m.

The money will be managed by FRM, Man Group's hedge fund subsidiary, in its managed account-based Local Government Pension Scheme (LGPS) platform.

Earlier this year, Man FRM was appointed to manage the Cornwall Pension Fund's hedge fund allocation.

Respective collaborations between Clwyd and Cornwall illustrate how schemes are increasingly working with asset managers to provide innovative and cost effective solutions, according to Man Group.

Man FRM's managed account LGPS solution offers a tailored approach for each LGPS looking to invest in hedge funds, at the same as being cost effective.

It provides participants with transparency into underlying positions, risks and costs and provides a sliding management fee that scales down, depending on the size of the collective assets managed.

This second major allocation from an LGPS Fund will therefore reduce management fees for both existing and prospective investors.

Man Group president Luke Ellis, said: "We have long acknowledged that investors demand the highest standards in transparency, control and governance and these critical factors are central to our managed account based portfolio design and construction."

"We also recognise the pressures that LGPS Funds are under to achieve cost reductions and our solution treats the funds as a single investor with regards to pricing, but as quite different investors in terms of the solution we provide."

Kieran Harkin, director of JLT Employee Benefits, a pension and employee benefit consultancy, said Man FRM offered a "compelling" solution.

He said: "The characteristics of Man FRM's LGPS solution are compelling, as individual Funds retail their independence of decision making in respect of strategy, while benefiting collectively from fee savings via total assets under management.

"In the context of the current LGPS environment, the collaboration between Clwyd and Cornwall should be seen as an example of what can be achieved by Funds working together in a proactive way."

First published 05.11.2015

Lindsay.sharman@wilmingtonplc.com