The $7.3 billion Transport for London (TfL)pension is moving management of its assets from Legal & General Investment Management (LGIM) to BlackRock.
BlackRock will now be running a £2.2 billion passive equity portfolio and a £1.6 billion liability-driven investing mandate for the TfL, reports the Financial Times. TfL has also invested £100 million with BlackRock to seed a renewable energy fund. LGIM will no longer manage any money for the pension. The mandate switch was driven by cost, a pension representative says.
The TfL manages the pension of 82,000 members, and had an investment income of £80 million in the year to March 2014. The fund’s annual average return was 13% over the last five years. TfL has also increased its private equity allocation and hiring new hedge fund managers, including AQR and Brevan Howard.
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