AXA Investment Managers today announced that it has been appointed by the Cornwall Pension Fund to manage a £50 million LDI mandate.
The £1.2 billion pension fund is the latest in what is currently only a handful of local authority pension funds to embrace LDI. 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.
Matthew Trebilcock, Deputy Head of Pensions and Treasury at Cornwall
Council, said: “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. We are very much looking forward
to working closely with AXA IM, utilising their expertise and experience in this space, in the implementation of our bespoke LDI solution.
Julian Brown, Senior Consultant at JLT Investment Consulting, commented: “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. This approach should help the Cornwall Pension Fund to reduce funding volatility and thereby provide greater future security.”
Tracey Milner, Local Authority Business Development Manager at AXA Investment Managers, said: “We are pleased and excited to be embarking on what we hope will be a long and productive partnership. This 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.”
AXA IM has long been at the forefront of LDI in Continental Europe and in 2012 extended these capabilities in the UK with the hire of Shalin Bhagwan and Lucy Barron from Legal and General Investment Management and Rodrigo Ostik who previously worked at Barclays Capital.
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