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Muzinich & Co. wins high yield pension scheme mandate

20 June 2012

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High yield and corporate credit fund manager Muzinich & Co. has won a £31m pension fund mandate.

The joint mandate from the industry-wide Coal Staff Superannuation Scheme and Industry-Wide Mineworkers' Pension Scheme (MPS) will see Muzinich & Co. run a single global high yield strategy for the funds. According to data held by Pension Funds Online, the schemes have total assets worth £9bn and £10bn respectively.

Jonathan Storer, secretary to both the pension schemes, said Muzinich & Co. was chosen for its intensive research-led investment approach that places a high priority on protecting capital - as well as generating investment growth.

"Muzinich's attention to detail and relatively cautious approach matched the Trustees' risk appetite," Storer said. The questioning manner with which it approaches investments in corporates and institutions with complex capital structures and debt covenants, often found in the financial and banking sector, was particularly attractive to our Trustees."

With the global high yield mandate the pension schemes have made an allocation away from index-linked gilts.

Joshua Hughes, institutional sales director for Muzinich & Co., said: "This is a very important mandate for us. These pension schemes have switched from index-linked gilts, a traditionally safe-haven. This is a strong vote of confidence in our ability to deliver equity-like returns but with significantly less volatility and downside risk.

"Investors are increasingly viewing high yield as a long-term portfolio position and the Industry-Wide Coal Staff Superannuation and Industry-Wide Mineworkers' Pension Schemes' mandate is further evidence of this."

Storer added that the move is part of a wider strategy review aiming to balance risk in the two funds. 

First published 20.06.2012