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TFL pension fund appoints BlackRock for £3.8bn investment mandate

18 June 2015

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Transport for London (TfL) has selected BlackRock to manage liability-driven investing (LDI) and passive equity portfolios totalling £3.8bn assets.

As at March 31, 2014, the fund had more than 82,000 members with assets of GBP 7.3bn, across multi-asset index strategies, enhanced index funds, bonds, global equities and alternatives.

Fund secretary of TfL Pension Fund, Stephen Field, said: "We have a duty to our Fund members to make sure we employ the best investment solutions and consider all possible market risks and opportunities.

"BlackRock is a key partner, helping us to navigate changing market conditions to deliver the outcomes we require for our members."

The GBP 1.6bn LDI mandate will include measures to protect the fund from market uncertainties, including inflation as well as interest rate and equity volatility, while measuring exposure to risk to achieve excess positive returns.

The fund's GBP 2.2bn passive equity exposure will include investments across a range of index funds – the primary objective for the fund being to hold sufficient assets to meet its member liabilities.

This new mandate follows an initial GBP 100m commitment made by the fund into the BlackRock Renewable Income UK Fund in March 2014 - a UK-focused fund that invests in onshore wind, offshore wind and solar projects - which is part of a strategy to introduce new asset classes into the fund's alternatives portfolio.

TfL previously had the majority of its assets with Legal & General Investment Management (LGIM).

Andy Tunningley, head of UK strategic institutional clients at BlackRock said: "These are demanding times for pension funds and we believe the varied risks they face are best managed by understanding the true drivers of the underlying asset classes.

"We look forward to bringing together the best of BlackRock's investment and risk management platform to deliver the best outcomes for the fund members."

First published 18.06.2015

Lindsay.sharman@wilmingtonplc.com