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AXA IM wins new UK mandate
17 January 2013
AXA IM has been appointed by Cornwall Pension Fund to manage a £50mln ($80.1mln) LDI mandate
AXA Investment Management
Cornwall Pension Fund
AXA Investment Managers has been appointed by the Cornwall Pension Fund to manage a £50m ($80m) LDI mandate.
AXA IM will be working with the Cornwall Pension Fund to help them manage their key liabilities, in particular inflation risk and interest rate risk. The £1.2bn pension fund is the latest of many local authority pension funds to adopt an LDI strategy.
"We decided to incorporate an LDI solution within our overall investment strategy in order to reduce the impact of volatility on council tax payers and on long-term contribution rates," said deputy head of pensions and treasury at Cornwall Council, Matthew Trebilcock.
In 2012 AXA IM extended its LDI capabilities in the UK hiring Shalin Bhagwan and Lucy Barron from Legal and General Investment Management and Rodrigo Ostik, who previously worked at Barclays Capital.
"While a large number of private pension funds have turned to LDI as a means of de-risking, to date we have only seen a small number of public sector funds adopting this practice," said senior consultant at JLT Investment Consulting, Julian Brown.
"This approach should help the Cornwall Pension Fund to reduce funding volatility and thereby provide greater future security."
According to Tracey Milner, local authority business development manager at AXA IM, added that "this [mandate] is an important first for both the Cornwall Pension Fund and everyone in the UK institutional team at AXA IM".
"As part of the AXA Group, we have considerable experience in constructing and implementing LDI strategies and we are keen to use this expertise to partner with UK pension schemes to help them manage funding level and contribution volatility."