Royal Mail plan hires BlackRock for £8.8bn OCIO mandate
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The Royal Mail Pension Plan has handed £8.8bn of assets to BlackRock, to manage as an outsourced chief investment officer. The deal, which completed on 1 February, includes a number of staff members of the plan’s investment team moving to the asset manager.
BlackRock taking over an entire portfolio along with in-house staff mirrors a deal it struck with British Airways in 2021, when the airline outsourced £21.5bn and its investment team to the firm.
Richard Law-Deeks, chief executive of the pension fund, said: “Our in-house team has delivered strong investment performance during some challenging markets over the last 20 plus years, meaning we are well funded. It is now time to consider how to lock in the stability and continuity of this position.”
He said the agreement with BlackRock ensures that knowledge is retained while benefitting from the wider expertise and scale of the world’s largest manager.
Sarah Melvin, who heads up BlackRock’s UK business, said: “We’re proud to be entrusted with managing the Royal Mail Pension Plan’s assets. The scheme has been run exceptionally well by the in-house team to date and we’re excited to welcome them to BlackRock to continue to serve the plan’s evolving needs.”
BlackRock has been partnering with businesses as OCIO since 2005 and manages the savings of more than 11m people in the UK.
Will more schemes swap in-house management for OCIOs?
