The West Sussex Pension Fund has terminated its 22-year relationship with Cushman & Wakefield Investors (now La Française Forum Real Estate Partners), transferring the management of its entire property portfolio to Aberdeen Asset Management.
The pension fund, which has around £1.9bn (€2.3bn) in assets, has a strategic allocation to property of 10%, which has been managed by C&W Investors since 1992, according to its annual report.
C&W Investors now trades under La Française Forum Real Estate Partners (LFF Real Estate Partners), following a takeover earlier this year.
West Sussex confirmed to IPE its decision to appoint Aberdeen as replacement for C&W Investors after putting the mandate out to tender in July last year. Aberdeen was selected after the exercise, which saw nine other companies competing for the portfolio.
The pension fund’s property investments, which according to its latest published report is valued at £184m, suffered a capital decline of 4.5% during 2012-13. West Sussex attributed the decline to weaker pricing in the secondary property market.
This left the local authority scheme below its strategic allocation, with property only accounting for 7.8% of total assets.
Its review of the property portfolio showed the manager had a negative 0.1% return in the past five years, 70bps below its benchmark, while delivering 4.6% over three years, 1.4 percentage points below.
The manager’s target was to provide 1% above the benchmark on a three-year period.
West Sussex had given C&W Investors a discretionary mandate for its property portfolio, which saw the manager purchase a range of assets including supermarkets.
The fund recieved close to £8.5m in rental income from the portfolio, its last published report showed.
In the announcement, West Sussex also said its contract with Aberdeen would allow the fund to increase its allocation to property to up to £500m, as it looks to move closer towards it strategic allocation.
Before changing its name to LFF Real Estate Partners, C&W Investors was jointly acquired by La Française and Forum Partners, as the pair looked to develop their real estate business in Europe.
The manager runs a pan-European portfolio and currently has around $1.2bn (€888m) in assets under management.