The in-house real estate investment team of British Airways Pensions, which manages a £1.66bn (€1.93bn) portfolio, have been transferred to BlackRock as part of a “transformational partnership” between the two organisations.
The move is part of a wider outsourcing of the investment management of some £21.5bn in pension assets, announced today by BA.
British Airways Pensions, which last year had allocations to property and real assets of 8.5% and 2.4%, respectively, said it had appointed BlackRock as the outsourced chief investment officer (OCIO) for all its uninsured assets.
Airways Pension Scheme and New Airways Pension Scheme are two of the UK’s largest corporate defined-benefit pension schemes, and the move brings to an end one of the country’s most experienced independent in-house pension-fund investment teams.
British Airways Pensions confirmed to IPE Real Assets that the real estate team of British Airways Pension Investment Management (BAPIML), led by head of property Paul Scott, have transferred to BlackRock.
Scott has run the real estate investments at British Airways Pensions for 20 years and his deputy has been at the organisation since 1997.
IPE understands that the deal follows protracted negotiations between the BA trustees and BlackRock.
BlackRock manages more than $60bn (€49bn) in investor commitments to real assets globally and runs a £3bn open-ended property fund in the UK.
British Airways Pensions said the move marked “a seminal moment in the UK pensions industry”.
Roger Maynard, chair of trustees for the BA’s two pension schemes, said: “Operating as our in-house investment manager, BAPIML has delivered excellent investment performance and stewardship of the schemes over many years.
“This agreement is the necessary next step in the evolution of the schemes as they look to enhance their respective investment strategies, working toward their funding goals.
“In BlackRock, we have identified an asset manager that will ensure the continued focus on delivering enhanced oversight, investment management and long-term value for the schemes in the interests of our members.”
Sarah Melvin, head of BlackRock’s UK business, said: “British Airways is an iconic global brand and a leader in its sector. We are honoured to be entrusted to manage the assets of these two important pension schemes through the creation of a bespoke model.”