Shell pension plans outsource $40bn to OCIO
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Several Shell pension funds have hired Goldman Sachs Asset Management to handle a combined $40bn (£30bn) outsourced chief investment officer mandate. The tender process was managed by Isio.
The outsourced mandate will cover pension assets and a Shell-related captive insurer in the UK, Bermuda and Germany among others. The UK assets are worth $15.6bn, with $2.8bn from Germany’s pension fund. Some of the overall mandate includes liability-driven investing and cashflow-driven investing. The asset transitions are expected to complete later this year, and some people will join GSAM as part of the deal.
GSAM will also provide advisory services for Shell pension plans in the USA and Canada.
A Shell spokesperson said that plan sponsor Shell acted as a “coordinator” but did not make any decisions regarding management of its pension funds: “Those decisions were made by the individual funds themselves.”
The outsourced mandate will cover pension assets and a Shell-related captive insurer in the UK, Bermuda and Germany among others. The UK assets are worth $15.6bn, with $2.8bn from Germany’s pension fund. Some of the overall mandate includes liability-driven investing and cashflow-driven investing. The asset transitions are expected to complete later this year, and some people will join GSAM as part of the deal.
GSAM will also provide advisory services for Shell pension plans in the USA and Canada.
A Shell spokesperson said that plan sponsor Shell acted as a “coordinator” but did not make any decisions regarding management of its pension funds: “Those decisions were made by the individual funds themselves.”
Shell pension trustees will have access to GSAM’s global investment offer across public and private markets. The asset manager said the appointment seeks to deliver performance and cost savings for the asset pools through greater scale and efficiency.
Global head of asset and wealth management at GSAM, Marc Nachmann, said pension funds and other investors increasingly look for “differentiated alpha, holistic total portfolio advice and customised portfolio solutions”, finding that OCIOs may have the required expertise, tech resources and operational infrastructure.
Two years ago, GSAM won what was then the largest outsourced chief investment officer mandate in the UK from the BAE Systems pension trustees, worth £23bn, also taking on the pension investment team of the defence giant.
There has been an increase in OCIO mandates in the past few years as schemes mature.
In 2023, the Kier Group schemes appointed Schroders to manage £1.2bn, the £830m Northumbrian Water Pension Scheme hired Cardano, and the Royal Mail Pension Plan handed £8.8bn to BlackRock for management, the company that was appointed to manage the British Airways scheme in 2021.
