Henderson edged out 88 entrants in the contest cosponsored by Universities Superannuation Scheme and Hewitt Bacon & Woodrow, according to an IPE report. The competition asked entrants to respond to an imaginary € 30-billion mandate (See Winner of UK Investment Contest to be Picked Wednesday ).Henderson’s objective was to grow the mandate “at a rate above that required to meet all future liabilities, without taking undue risk”.
Henderson proposed a dynamic benchmark approach and to dividethe portfolio into two: a € 25 billion “core portfolio” with 50% in equities, 20% each in bonds and property, and 10% in private equity; and €5 billion “added value portfolio” that would “harvest alpha” through a series of absolute return sub-funds.
The proposal called for a specially
made benchmark. “Monitoring achievement against the
fund’s principal objective will require the construction
of a tailored benchmark for the overall fund. This should
incorporate a rolling record of liability assumptions,
together with a similar record of investment
assumptions,” Henderson’s proposal said. “This will
result in the fund benchmark itself being dynamic. The
performance of the total fund will be measured annually
and will be analyzed relative to the benchmark over
rolling periods – both medium and longer term.”
The other two money managers on the short list were Schroder Investment Management and Sustainable Forest Systems. There were five non-corporate entries.