14/09/2011 Author: Kirstie Brewer

BBC Pension Trust hires Prisma and Cambridge

The $8.9bn British Broadcasting Corporation (BBC) Pension Trust has appointed Prisma Capital Partners and Cambridge Associates to manage a portfolio of hedge funds, the scheme’s annual report discloses, and will also consider fresh searches in the future, a spokesperson told HFMWeek.    

The BBC has allocated $272m to investment adviser Cambridge Associates and $94m to fund of hedge funds (FoHF) firm Prisma Capital Partners, as it continues to increase its level of investment diversification in a bid to tackle its £1.4bn ($2.21bn) deficit.

“Both…provided a portfolio of diversified, high-quality hedge fund managers that fitted well with the scheme’s return-seeking assets. The quality of the investment and operational due diligence carried out by the managers was also a key factor,” a BBC spokesperson told HFMWeek.

“We will consider further investments in hedge funds in the future, but these decisions will be made considering other factors such as our scheme liabilities and the return/risk requirements,” the spokesperson added.

The scheme, which has more than 60,000 members, invests around 14.7% in alternative assets, and 7% in hedge funds specifically, with FoHFs Cambridge and Prisma – whose co-founder is former BBC chairman Gavyn Davies – now taking the lion’s share of the allocation.  

Around one third of the alternatives portfolio is allocated to private equity, and up to 20% of the overall investment portfolio can be allocated to alternative investment vehicles, though there is no fixed allocation target, the spokesperson confirmed.  

The news comes amid widespread activity in the scheme, most notably the announcement that Peter Dunscombe retired at the end of June, after 11 years as director of pensions investments, with James Duberly, former managing director of Russell Investments, taking up the role.

A ‘journey plan committee’ has also been set up, charged with helping to safeguard the scheme’s future by looking at how its investment strategy should change in the years to come.