The Surrey Pension Fund’s recently published 2024/25 Annual Report details significant investment strategy adjustments and future intentions.
Strategic Asset Allocation Refinement
For the fiscal year ending March 31, 2025, the Fund adjusted its strategic asset allocation. The target allocation for Listed Equities decreased from 55.8% to 58.5% (actual), while Alternatives decreased from 27.3% to 23.0% (actual). Credit remained stable at 16.9% (actual). Within Listed Equities, Global Sustainable increased from a target of 19.5% to an actual allocation of 37.6%. In Alternatives, Real Estate decreased from a target of 7.3% to an actual allocation of 5.0%. Private Equity, Infrastructure, and Private Debt also saw adjustments in their actual allocations compared to targets. (Source: Surrey Pension Fund 2024/25 Annual Report, page 110)
Global Equity Alpha Mandate Transitioned to Passive Management
Towards the end of the fiscal year, the Surrey Pension Fund decided to divest from Border to Coast Pensions Partnership’s (BCPP) actively managed Global Equity Alpha Fund. The allocation will be transferred to the L&G Future World Global Equity Index Fund, which is passively managed against a bespoke index of global companies. This decision followed an extended engagement with BCPP. (Source: Surrey Pension Fund 2024/25 Annual Report, page 124-125)
Commitment to Private Markets Series 3A
The Fund committed new capital to Series 3A of the BCPP Private Markets Programme. This commitment includes £40 million for Infrastructure, £30 million for Private Equity, and £85 million for Private Debt. (Source: Surrey Pension Fund 2024/25 Annual Report, page 125)
Real Estate Benchmark Change
Effective January 1, 2025, the benchmark for the CBRE Real Estate mandate changed to a 6% absolute return per annum. Previously, the benchmark was the MSCI/AREF UK QPFI All Balanced Property Fund Index, with a performance objective to exceed it by 0.5% per annum over three-year rolling periods. This change reflects the commencement of asset transition from CBRE to the pool, which is expected to take several years and will impact the balanced nature of the existing mandate. (Source: Surrey Pension Fund 2024/25 Annual Report, page 104)
Migration of Non-Pooled Assets to Border to Coast Pensions Partnership
The Committee agreed to map the transfer of the remaining non-pooled equity mandate to the Border to Coast Pensions Partnership (BCPP). As of March 31, 2025, 42% of the Fund’s investments were held directly with BCPP, with an additional 43% managed within the pool structure. The remaining global equities assets outside the pool have been designated for meeting private investment capital calls and increasing investment in real estate, both of which will be managed by the pool. (Source: Surrey Pension Fund 2024/25 Annual Report, page 4, 111)
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