UK – The €27bn Electricity Supply Pension Scheme has terminated its £1bn (€1.48bn) real estate mandate with F&C, the asset manager says.
The disclosure came as F&C unveiled a pre-tax loss of £21m for the first half, compared to a £2.8m loss in the prior-year period. Net revenues were up to £146.1m from £140.2m.
“We have also been notified by the Electricity Supply Pension Shem of the termination of our contract to manager their £1bn property portfolio”, with effect from the third quarter, the asset manager said in a release to the stock exchange.
ESPS chief executive Richard Barlow confirmed the move, saying the fund was in “advanced negotiations” with another fund manager, which he declined to name.
F&C also confirmed that it would be losing £1.5bn in assets from Dutch pension client Vervoer, which as previously reported has appointed Goldman Sachs Asset Management as a fiduciary manager.
F&C said it would lose around £3.8m in fees from Vervoer and ESPS.
It would take a £44.8m “impairment charge” relating to the loss of both investment trust and institutional mandates.
F&C’s assets under management have slipped to £107bn from £131bn at the end of last year – mostly reflecting the withdrawal of £20.1bn of assets by Resolution Plc.
Excluding insurance flows, it said the total net outflow in the first half amount to £3.9bn.
F&C also reported that its group pensions deficit had reduced from £48m to £35m – largely driven by the increase in corporate bond yields since the year-end.
The company also said it would launch liability-driven investing (LDI) products in the UK and Ireland in the second half, building on its experience in the Dutch market.
But the rise of fiduciary management in the Netherlands, as exemplified by the Vervoer deal, was a “risk factor” for the group.