Independent investment consultant, Redington, and law firm, Travers Smith LLP, have advised the Trustees of the BAE Systems Pension Scheme and the BAE Systems Executive Pension Scheme on the outsourcing of the investment management of approximately £23bn of pension scheme assets to Goldman Sachs Asset Management (GSAM).
Professional services firm, PwC, has advised BAE Systems plc.
The appointment of GSAM as Outsourced Chief Investment Officer (OCIO) is the largest OCIO mandate announced in the UK to date.
Redington, which has been strategic investment advisor to the Trustees since 2021, will now work with the Schemes and GSAM to oversee the implementation of the agreed strategy and ongoing relationship.
Andrew Gallagher, Chair of Trustees for the BAE Systems Pension Scheme and BAE Systems Executive Pension Scheme, said: “Implementing this change was critical to future-proofing our investment management capabilities and it was a substantial undertaking. The Trustees benefited from all our advisers’ deep understanding of our needs, expertise and unparalleled knowledge of this market to help us reach this agreement.”
Susie Daykin, Travers Smith Pensions Partner, commented: “We are delighted to have helped the Trustees complete this appointment. This is a significant transaction for the Trustees, involving a wide range of investments, requiring close collaboration from lawyers across our Pensions Sector practice.”
Carolyn Schuster-Woldan, Head of DB Consulting Team at Redington, said: “Along with our OCIO advisory team, we’re delighted to have advised the Trustees throughout this process. The Schemes have a unique approach and an engaged sponsor and the collaborative approach taken throughout played a crucial role in its successful outcome.
“We look forward to continuing to work together to help provide financial security for the Schemes’ 185,000 members.”
Keira-Marie Ramnath, pensions asset management outsourcing lead at PwC, commented: “We’re delighted to have worked with BAE Systems and their other advisors to outsource the investment management for their pension schemes. There is a growing trend among pension schemes that want to retain control of investment strategy and asset allocation while benefiting from the operational efficiencies of a single manager. “The new structure retains many desirable aspects of an ‘in-house manager’ such as a dedicated client team and bespoke tailoring, and combines these with the efficiency and scale of a large ‘outsourced manager’ that an entity like Goldman Sachs Asset Management brings.”