BA appoints BlackRock as external investment manager for £21.5bn of pension assets

British Airways (BA) Pensions has appointed BlackRock as its outsourced chief investment officer (OCIO) for around £21.5bn of its pension schemes’ assets.

BlackRock will manage the pension benefits of over 85,000 members of the Airways Pension Scheme and New Airways Pension Scheme.

The assets were previously managed by in-house provider, British Airways Pension Investment Management Limited (BAPIML).

BA Pensions said that its decision to appoint an external investment manager was “the first of its kind in the UK pensions industry at this scale”.

The partnership was agreed as BA Pensions felt that, in recent years, regulation had intensified, operational costs had risen, and investment complexity had increased.

Additionally, the schemes had continued to mature and their investment needs had changed, which BA Pensions said required an increased focus on managing investments.

BlackRock was appointed following a competitive tender process and was selected for its “deep knowledge and commitment to the UK pensions industry, its scale and investment expertise, and its market-leading risk management technology”.

The schemes’ trustee chair, Roger Maynard, commented: “Operating as our in-house investment manager, BAPIML has delivered excellent investment performance and stewardship of the schemes over many years.

“This agreement is the necessary next step in the evolution of the schemes as they look to enhance their respective investment strategies, working toward their funding goals.

“In BlackRock, we have identified an asset manager that will ensure the continued focus on delivering enhanced oversight, investment management and long-term value for the schemes in the interests of our members. We look forward to working with BlackRock in the years ahead.”

PwC pensions asset management outsourcing lead, Keira-Marie Ramnath, added: “We’re delighted to have worked with the British Airways Pensions executive, the trustees of the two BA schemes, and their other advisers to outsource their investment management and put the schemes on a firm footing for the future.

“The new structure retains some of the best features of an ‘in-house manager’, such as a dedicated strategic client team at BlackRock who will focus solely on the BA schemes, and combines these with the efficiency and scale of a large ‘outsourced manager’ that an entity like BlackRock brings.

“We are seeing a trend among larger pension schemes that want to retain control of investment strategy and asset allocation while benefiting from the operational efficiencies of a single manager.” 

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