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Nilgosc


Fund Management

NILGOSC retains overall responsibility for the Fund, with the power to appoint one or more fund managers to manage and invest fund monies on its behalf. In appointing fund managers, NILGOSC retains statutory responsibility for the management of the Fund and that responsibility cannot be delegated.

NILGOSC has a statutory duty to:

  • Take account of the amount to be managed by each manager and be satisfied, having taken advice, that it is not excessive
  •  Have regard to the suitability of investments
  •  Monitor the performance of the managers and from time to time review their appointment
  •  Take proper advice, obtained at regular intervals

NILGOSC maintains overall control of the Fund by:

  •  Agreeing the overall investment objectives with the fund managers taking into account actuarial expectations and investment powers
  •  Setting targets for asset allocation
  •  Monitoring investment performance
  •  Monitoring investment transactions.

NILGOSC has compiled a Statement of Investment Principles (SIP) as required by the Local Government Pension Scheme (Management and Investment of Funds) Regulations (Northern Ireland) 2000. Copies of the SIP are available on request or can be downloaded from here (*PDF, 193KB).

The allocation of the Fund between asset classes is determined by NILGOSC at its annual strategy meeting, normally held in October each year. NILGOSC has determined the types of asset class in which it wishes to invest and has selected a range of fund managers to manage particular types of asset class depending on their area of expertise.

The table below sets out the mandates and primary fund investments in place as at 31 March 2018 and details the type and percentage of assets invested with each at this date, including cash held for trading purposes per fund manager. In the case of the primary funds, the amount shown in the table reflects the amount drawn down by the fund at 31 March 2018 and not the total commitment made to the fund. This information can be found in the footnote to the table below.

Asset Class

Fund Manager / Primary Fund

% of Total Fund

Mandates

UK Equities Baillie Gifford 3.41%
UK Unconstrained Equities BlackRock Investment Management1 0.03%
Jupiter Asset Management 5.60%
Global Equities Wellington Management 7.20%
Global Unconstrained Equities Baillie Gifford 8.98%
Unigestion 4.89%
Passive Funds
Legal & General Investment Management
54.38% 
Bonds Wellington Management 3.06% 
Traditional Property LaSalle Investment Management 6.51%
Index-Linked Property LaSalle Investment Management 3.59%
Primary Funds:

UK Residential Property M&G UK Residential Property Fund2 0.39%
Infrastructure Antin Infrastructure Fund II3 0.53%
Antin Infrastructure Fund III4
0.09%
KKR Global Infrastructure Investors Fund II5
0.50%
KKR Global Infrastructure Investors Fund III6
0.00%
DIF V7
0.14%
Co-Investments: Various co-investments8
0.60%
Smaller NI Investments: Various 0.10%

Source: The Northern Trust Company
1The mandate with BlackRock Investment Management was terminated and an in-specie asset transfer to LGIM took place in March 2018. Holdings were subsequently liquidated and units purchased in the LGIM Index Linked Gilts (ILG) fund. Some illiquid assets remained in a LGIM transition account at year end, and were liquidated early in 2018/19 financial year and proceeds used to purchase ILG fund.

2Total commitment £100m

3Total commitment €48m (£42.1m converted at the exchange rate at 31 March 2018)

4Total commitment €75m (£65.8m converted at the exchange rate at 31 March 2018)

5Total commitment $60m (£42.8m converted at the exchange rate at 31 March 2018)

 6Total commitment $50m (£35.6m converted at the exchange rate at 31 March 2018)

 7Total commitment €50m (£43.8m converted at the exchange rate at 31 March 2018) 

8Total commitment €45.8m ( consists of funds denominated in sterling and euro, commitment for euro fund converted at the exchange rate at 31 March 2018)
 

 

All fund managers are responsible for the selection of individual stocks within each type of asset class. NILGOSC’s passive manager, Legal & General Investment Management (L&G), is responsible for maintaining the asset allocation within the agreed ranges. When a range is breached, L&G will rebalance the Fund back within the agreed tolerance.

Each manager is remunerated on a fee basis, dependent on the market value of the portfolio and in some cases the level of performance achieved. These structures have been established in order to align the interests of the fund managers with those of the Fund. The percentages of the Fund allocated to each fund manager will fluctuate depending on performance and/or can be changed by NILGOSC at any time. NILGOSC has a range of controls in place to monitor investment by fund managers.


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