Post Office Pensions Trustees Limited (POPTL), manager of the GBP16 billion UK Post Office pension fund, has completed a GBP450 million expansion of its allocation to private equity. The fund’s commitment to private equity now represents around three per cent of its total. Having reviewed a number of different strategies, POPTL took the decision to significantly increase its private equity allocation through the creation of three fund-of-funds portfolios. Two of these funds are allocated to global managers and one will be a European-centric fund-of-funds provider. POPTL has appointed London-based specialist advisors to the private equity community, Campbell Lutyens.
POPTL currently uses 14 managers overseeing 34 different portfolios. The fund’s selection process for the three mandates involved significant due diligence and analysis of around 20 fund-of-funds managers worldwide. The mandates were awarded as follows: Los Angeles-based Pathway Capital Management and Hamilton Lane Advisors of Pennsylvania for the global mandates, and Pantheon Ventures in London for the European-centric mandate. Carol Kennedy, partner at Pantheon Ventures, said: “We are absolutely delighted to have added another truly blue chip client to our portfolio.” Considering the strategy of how investments will be split in Europe, Kennedy believes that, as a UK-domiciled manager, Pantheon was favoured because of its depth of experience in the market and a knowledge of how to adapt teams to fit in with a European strategy.
Gerry Degaute, POPTL’s director of finance, is enthusiastic about the increase in the fund’s exposure to private equity and found the selection process both stimulating and very difficult. He said: “We studied some very fine firms and had very detailed discussions with all semi-finalists. The final choices were all close decisions, and I have no doubt that when we review our allocation to private equity in the future, we will be revisiting many of them again as these leading managers have all demonstrated the ability to deliver high quality performance.”