The pension funds for the Performing Right Society, the GBP11 million Mechanical Copyright Protection Society Pension Fund and the GBP110 million Performing Right Society Pension Fund, will seek a global tactical asset allocation manager in the next few weeks. It has short-listed Mellon Global Investments and Goldman Sachs Asset Management and one will be appointed to run around 5% of both funds’ combined assets, said Gary Bundy, pensions manager at PRS in London.
The move follows a reshuffling of both schemes’ fund managers at the beginning of the year. PRS is expecting to increase returns with a GTAA manager in place. “It’s a risky bet but investing a small amount like 5% the risk/reward element is acceptable for both funds,” said Bundy. He declined to speculate on which manager would have a better chance of winning the mandate. Jonathan Lubran, director of U.K. institutional sales at Mellon, and Oliver Bolitho, head of U.K. and Irish institutional business at GSAM, did not return calls by press time.
At the beginning of the year, the MCPS fund terminated sole manager F&C Asset Management for poor performance. Bundy did not provide figures but said that “underperformance went back to the ISIS [Asset Management] days.” ISIS bought F&C in July 2004; F&C later took over ISIS’ institutional business. To replace the manager the scheme has hired Escher for a multi-manager U.K. equity mandate and Morley Fund Management for a real estate brief. Legal & General Investment Management has also been appointed for a balanced bonds and international equity pooled brief. It invests 36.5% in overseas equity, 36% U.K. equity, 12.5% property, 7.5% gilts and 7.5% corporate bonds.
The PRS scheme has also made some changes. Sole balanced manager Martin Currie Investment Management saw its portfolio cut to just managing an equity account, while L&G has won a bond brief. Morley was also picked for property. The fund invests 43.5% in U.K. equity, 29% international equity, 10% property, 8.8% gilts and 8.7% corporate bonds.
Bundy said both funds have different funding positions but both are in deficit, with the largest scheme having the biggest deficit, which he declined to quantify. The company injected some GBP25 million in December to plug the funds’ gaps. Early next year the copyright company will review a plan to merge the two schemes. He did not elaborate further.