HSBC Global Asset Management has been chosen as one of two managers to collectively manage £60 million in active frontier market equities, on behalf of the £1.4 billion Cornwall Pension Fund and its members.
The HSBC frontier markets equity strategy invests across 25 frontier market countries, and makes use of the bank’s global asset management’s emerging markets platform (with around £90 billion in emerging markets AUM).
The bank first formed a dedicated frontier markets equity team in 2007, and launched its first mutual fund early the following year. One of its longest mandates has been with the Florida State Board of Administration, in managing its global frontier market equity mandate.
“The strategy has delivered strong outperformance for the benefit of its clients over most time periods, and proven to be resilient through some extreme market events, including the Dubai debt crisis, Arab Spring, and Syrian Crisis,” said a statement from HSBC.
Cornwall’s allocation to global frontier markets has come about from a restructuring of its equity programme (representing 25 percent of the pension fund’s assets), which now comprises 60 percent global equities, 20 percent active emerging market equities and 20 percent active frontier market equities.
Julian Brown at JLT Investment Consulting advised Cornwall on this strategic allocation and the consultant bfinance assisted with the manager search.
Matthew Trebilcock, pension investment manager of Cornwall Pension Fund, said: “Like all pension funds, we are focused on where we are likely to see investment growth in the future. We are confident that in HSBC Global Asset Management we have secured a partner with deep insight into the companies that will be at the forefront of the growth in the next wave of developing economies.”
