The Royal Mail Pension Plan (RMPP) has increased its assets to £7.5 billion (€8.8 billion; $9.8 billion) within the last 12 months and allocated more to debt in the same period at the expense of equities.
The pension fund manages two portfolios, the Royal Mail Group (RMG) and Post Office Limited (POL). Both portfolios increased their allocation to alternative investments and investment grade credit. POL’s allocation to high yield credit remained the same at just under 5 percent, while RMG’s increased from 2.9 percent to 3.4 percent.
In the POL portfolio, exposure to equities dropped from 10.8 percent to just 0.2 percent, a big drop compared with the RMG portfolio which fell from 10.2 percent to 9.8 percent.
RMG’s return on return-seeking assets hit 3.8 percent between March 2015 and March 2016, averaging 5.7 percent overall across the last three years. POL’s returns hit 2.3 percent across the 12 months and 2.7 percent on average in the last three years.
Among debt funds the pension fund has committed to managers including Oaktree and ICG, investing £71 million and £33 million respectively. RMPP declined to comment further on the details of its investments.
Available data covered allocations up until 31 March 2016. Overall, across the period, the fund increased its assets by $1 billion, according to its annual Report and Financial Statements.
Joanna Matthews, chair of RMPP, said: “The increase is equally split between net cash inflow from other contributions after benefit payments and investment returns. Despite this increase in assets we know that the liabilities of the plan have increased as well. This is because of the continued worsening of the condition of the financial markets.”
The RMPP is the pension plan for existing and former employees of The Royal Mail, the UK-state owned postal delivery network. The fund is headquartered in Chesterfield in the north of England.