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 (*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 table below sets out the mandates and primary fund investments in place as at 31 March 2021 and details the type and percentage of assets invested with each at this date, including cash held for trading purposes. In the case of the primary funds, the percentage shown in the table reflects the value of NILGOSC’s asset investment (excluding derivatives, investment cash and cash equivalents) at 31 March 2021 and not the total commitment made to the fund. This information can be found in the footnote to the following table:

Mandates

Asset ClassFund Manager% of Total Fund
Global Unconstrained EquitiesBaillie Gifford11.55%
Global Unconstrained Equities Unigestion4.38%
Passive FundsLegal & General Investment Management43.10%
Absolute Return Bonds (ARB)Royal London Asset Management7.14%
Absolute Return Bonds (ARB) T. Rowe Price7.27%
Multi Asset Credit (MAC)BlueBay7.08%
Multi Asset Credit (MAC) PIMCO6.90%
UK Traditional PropertyLaSalle Investment Management4.69%
Index Linked PropertyLaSalle Investment Management2.81%
Global PropertyCBRE Global Investment Partners0.80%

Primary funds

Asset classFund manager% of total fund
UK Residential PropertyM&G UK Residential Property Fund1 1.07%
InfrastructureAntin Infrastructure Fund II20.22%
InfrastructureAntin Infrastructure Fund III30.64%
InfrastructureAntin Infrastructure Fund IV40.17%
InfrastructureKKR Global Infrastructure Investors Fund II50.37%
InfrastructureKKR Global Infrastructure Investors Fund III60.17%
InfrastructureDIF V70.34%
Infrastructure CIP Fund80.00%
Infrastructure Antin Mid Cap90.00%
Infrastructure Co-Investments Various101.20%
Smaller NI InvestmentsVarious110.06%
Source: The Northern Trust Company

1 Total commitment £100m

2 Total commitment €48m (£40.9m converted at 31 March 2021 exchange rate)

3 Total commitment €75m (£63.9m converted at 31 March 2021 exchange rate)

4 Total commitment €75m (£63.9m converted at 31 March 2021 exchange rate)

5 Total commitment $60m (£43.5m converted at 31 March 2021 exchange rate)

6 Total commitment $50m (£36.2m converted at 31 March 2021 exchange rate)

7 Total commitment €50m (£42.6m converted at 31 March 2021 exchange rate)

8 CIP Fund IV not yet funded. Total commitment €50m (£42.6m converted at 31 March 2021 exchange rate)

9 Antin Mid Cap not yet funded. Total commitment €45m (£38.3m converted at 31 March 2021 exchange rate)

10 Total commitment £64.0m, €65.3m and $20.6m (£134.6m converted at 31 March 2021 exchange rate)

11 Includes residual cash holdings following termination of UK Equities Fund Manager, Jupiter Asset Management in March 2021

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, LGIM is also responsible for maintaining the overall asset allocation within agreed ranges under normal circumstances. Typically, when a range is breached, LGIM will rebalance the Fund back within the agreed tolerance. The rebalancing service has been suspended to allow for an effective transition to the new asset allocations and investment strategy.  Rebalancing is expected to recommence during 2021/22, following funding of the new Emerging Markets mandate.

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.