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 (*PDF, 193KB).
The allocation of the Fund between asset classes is formally reviewed every three years. 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 tables below set out the mandates and primary fund investments in place as at 31 March 2020 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 value of NILGOSC’s investment in the fund at 31 March 2020 and not the total commitment made to the fund. This information can be found in the footnote to the tables below.
|Asset class||Fund manager||% of total fund|
|UK Equities||Jupiter Asset Management||3.74%|
|Global Unconstrained Equities||Baillie Gifford||9.52%|
|Global Unconstrained Equities||Unigestion||4.90%|
|Passive Funds||Legal & General Investment Management||38.39%|
|Absolute Return Bonds (ARB)||Royal London Asset Management||7.38%|
|Absolute Return Bonds (ARB)||T. Rowe Price||7.40%|
|Multi Asset Credit (MAC)||Bluebay||6.83%|
|Multi Asset Credit (MAC)||PIMCO||6.96%|
|UK Traditional Property||LaSalle Investment Management||5.90%|
|Index-Linked Property||LaSalle Investment Management||3.53%|
|Global Property*||CBRE Global Investment Partners||0.00%|
*This mandate was implemented in February 2020 but was not funded before 31 March 2020.
|Asset class||Fund manager||% of total fund|
|UK Residential Property||M&G UK Residential Property Fund1||1.34%|
|Infrastructure||Antin Infrastructure Fund II2||0.52%|
|Infrastructure||Antin Infrastructure Fund III3||0.86%|
|Infrastructure||Antin Infrastructure Fund IV4||0.01%|
|Infrastructure||KKR Global Infrastructure Investors Fund II5||0.66%|
|Infrastructure||KKR Global Infrastructure Investors Fund III6||0.18%|
|Smaller NI Investments||Various||0.06%|
1 Total commitment £100m
2 Total commitment €48m (£42.5m converted at 31 March 2020 exchange rate)
3Total commitment €75m (£66.4m converted at 31 March 2020 exchange rate)
4Total commitment €75m (£66.4m converted at 31 March 2020 exchange rate)
5Total commitment $60m (£48.4m converted at 31 March 2020 exchange rate)
6Total commitment $50m (£40.3m converted at 31 March 2020 exchange rate)
7Total commitment €50m (£44.2m converted at 31 March 2020 exchange rate)
8 Total commitment £64.0m, €64.5m and $20m (£137.2m converted at 31 March 2020 exchange rate)
All fund managers are responsible for the selection of individual stocks within each type of asset class. In addition to managing the Fund’s passive holdings, Legal & General is also responsible for maintaining the overall asset allocation within agreed ranges under normal circumstances. Typically, when a range is breached, Legal & General will rebalance the Fund back within the agreed tolerance. This rebalancing was however suspended throughout 2019/20 to allow an effective transition to the new asset allocations and investment strategy. Rebalancing is expected to recommence during 2021.
Each manager is remunerated on a fee basis, dependent on the market value of the mandate. 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.