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NEST hires L&G as real estate manager

08 July 2013

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The National Employment Savings Trust (NEST) has awarded Legal & General Investment Management with two real estate mandates.

The new mandates represent NEST's first direct investment into commercial property as part of its investment strategy.

NEST said that its target date fund structure and its expected scale ensure that it can incorporate these mandates as part of a diversified and actively risk-managed approach, while maintaining its very low member charge.

NEST chief investment officer Mark Fawcett said: "We're always searching for cost-efficient opportunities to access rewarded risk for our members. These new mandates, along with other building blocks we add in the future, continue to allow us to develop our award winning strategy.

"Legal & General was chosen because it delivers on our demanding requirements for excellence in investment processes and philosophy, high quality risk management and a comprehensive integration of environmental, social and governance (ESG) factors.

"These elements give us confidence that we will continue to deliver strong and sustainable performance for NEST members."

The two mandates will make up a sizeable portion of the NEST Retirement Date Funds, as well as the NEST Higher Risk Fund and NEST Ethical Fund options.

Legal & General Property managing director Bill Hughes said: "NEST is an industry-leading platform and likely to be one of the most significant participants in the UK pensions industry over the next decade, therefore we see this strategic decision to include direct property within its key building blocks as a major step forward for commercial real estate within the new world of DC pensions and a significant endorsement of our funds.

"Offering an innovative and bespoke solution for DC schemes, our fund enables this growing market to gain access to property market returns, whilst also providing enhanced diversification and liquidity."

First published 08.07.2013