The asset management division of Credit Suisse has been awarded a £80-million 'New Balanced' diversified growth mandate from Morgan Crucible Company plc in a competitive pitch. Morgan Crucible was advised by HSBC Consultants & Actuaries.
The mandate will go into Credit Suisse's Nova (Lux) Diversified Growth (£) Fund. The Fund takes a global multi-asset class approach to investing and endeavors to achieve long term returns comparable to equities with less volatility than a pure equity portfolio by investing in growth orientated and risk diversifying funds with a currency overlay. The Fund is run on an absolute return basis with a target return of 1 month GBP Libor + 400 bps (net of fees) and has, since launch in September 2006 generated excellent returns in its first three months of 6.94% versus 2.17% for the benchmark.
The investment process is separated into strategic and tactical asset allocation elements combining traditional equity and commodity assets with growth as well as risk diversifying assets with Credit Suisse's Institutional Multi Asset Class Solutions (iMACs) investment process.
Commenting, Terry O'Malley, Head of UK Institutional Distribution for Asset Management at Credit Suisse, said, "Morgan Crucible's decision to appoint us is a clear endorsement of the skills of our MACs team and investment approach. We look forward to working with them towards achieving the goals set for their pension fund. The Diversified Growth Fund was developed in response to the need for schemes to diversify, coupled with the new accounting and regulatory changes in the UK which have made pension funds and trustees look at LDI solutions. This need to capture high sustainable returns within risk limits requires a dynamic approach to active portfolio management which led us to create and establish this innovative and outstanding product."
Commenting on the Fund, Kevin Frisby, Investment Consultancy Director, HSBC Consultants & Actuaries Limited, said, "We believe it is imperative for the fund management industry to respond to the ever-growing demand for Diversified Growth products and were impressed with the solution that Credit Suisse was able to offer our client."
Commenting on the appointment, Geoffrey Weir, Director of Group Benefits & Compensation, Morgan Crucible Company plc, said, "We were very impressed with the Diversified Growth product offered by Credit Suisse and their track record in this area, and believe such a multi-asset class solution will help us meet our investment requirements."
Source: Credit Suisse