Brunel’s Sterling Corporate Bond fund offers credit range and RI integration

9 August 2021

Brunel Pension Partnership Limited posts the following on its website:

“Brunel Pension Partnership Limited (Brunel) is very pleased to announce the launch of its Sterling Corporate Bond fund.

Brunel is one of eight pooled Local Government Pension Scheme funds in the UK. Brunel’s clients have committed approximately £2.1 billion of funds to the Sterling Corporate Bond sub-fund, which will be managed by Royal London.

“The fund is highly diversified, providing our clients with access to a range of holdings, as well as a range of maturities,” said David Cox, Head of Listed Markets at Brunel. “Our clients’ prioritisation of ESG considerations was also reflected in the fund’s design and manager selection process. The manager is contractually committed to providing evidence of ESG impacts of decisions taken in the fund, and of any broader contributions the fund is making to investing responsibly.”

Credit variety, credit selection

The sub-fund can invest directly into a range of sterling-denominated bonds of UK and overseas public companies, international agencies, housing charities, private companies, and via securitised debt. It can invest across a range of maturities.

Through our manager selection process, we were convinced that Royal London Asset Management had the best approach to credit selection and were impressed by its long-term approach and comprehensive due diligence. Royal London has a highly diversified portfolio and a team-based approach, which gave us confidence that a single-manager solution met our clients’ aims. Fundamentally, returns are consistently driven by credit selection. Furthermore, among all the applicants, Royal London offered the most impressive level of ESG integration.

Brunel received 26 tenders, from which we ultimately chose five potential managers for further due diligence. Brunel engaged Mercer and David Saab, our fixed income consultant, during the selection process.

“Given Brunel’s reputation in RI and forensic selection process, we were delighted to be appointed to the mandate,” said Paola Binns, Head of Sterling Credit, Royal London Asset Management. “Our track record in delivering on both performance and ESG criteria stood us in good stead and we believe Brunel has found a good match.”

Eligible instruments include sovereign bonds, sub-sovereign bonds, corporate bonds, asset-backed securities, spot FX, FX forwards, government bond futures, interest rate futures and money market funds, as defined by inclusion in our benchmark, the iBoxx Sterling Non-Gilt All-Maturities Bond index.

The fund has been designed to gain exposure to sterling bond markets and the credit risk premium, with additional returns from manager skill in credit selection.”

Source: Brunel
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