The Orkney Islands Council Pension Fund’s recently published ‘Annual Report and Accounts of the Orkney Islands Council Pension Fund 2024/2025’ details significant changes to its investment strategy, including a full disinvestment from multi-asset mandates and increased allocation to protection assets.
Strategic Asset Allocation Overhaul
For the fiscal year 2024/2025, the Orkney Islands Council Pension Fund implemented a revised investment strategy, transitioning away from multi-asset mandates and increasing its allocation to protection assets. This decision, agreed upon during a February 2024 review, aims to reduce the fund’s risk profile. The fund’s holdings in growth-seeking assets were reduced to fund new allocations to income-generating assets, further diversifying investments. (Source: Annual Report and Accounts of the Orkney Islands Council Pension Fund 2024/2025, page 8)
Disinvestment from Multi-Asset Mandates
During the 2024/2025 fiscal year, the fund fully disinvested from its Multi-Asset Growth and Diversified Growth pooled funds. The Multi-Asset Growth pooled fund, valued at £41,595,000 at March 31, 2024, was reduced to £0 by March 31, 2025. Similarly, the Diversified Growth pooled fund, valued at £47,726,000 at March 31, 2024, was reduced to £0 by March 31, 2025. The proceeds from these disinvestments were reallocated into protection assets. (Source: Annual Report and Accounts of the Orkney Islands Council Pension Fund 2024/2025, page 8, 11, 45)
Increased Allocation to Fixed Income
As part of the revised strategy, the fund significantly increased its allocation to Fixed Income. The Pooled Fund – Fixed Income saw an increase from £32,390,000 at March 31, 2024, to £134,101,000 at March 31, 2025. This represents a substantial shift towards bonds, which are now managed on a passive basis, as part of the strategy to enhance protection assets. (Source: Annual Report and Accounts of the Orkney Islands Council Pension Fund 2024/2025, page 8, 11, 45)
New Commitments to Private Debt
As of March 31, 2025, the fund has contractual commitments to invest up to £1.9 million and £6.1 million across two new mandates to Private Debt. While no further drawdowns are expected on the first mandate as it has reached the end of its investment period, drawdowns for the second mandate are anticipated to recommence over the next year and will be funded from within the Fund’s portfolio of investments. (Source: Annual Report and Accounts of the Orkney Islands Council Pension Fund 2024/2025, page 58)
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