PPF brings in private equity specialist

The £3bn UK pension lifeboat fund has appointed Guy Fraser-Sampson - former investment controller at ADIA - to advise its investment committee on its alternatives programme as it mulls an entry into the private equity market.

The UK’s Pension Protection Fund (PPF) has appointed Guy Fraser-Sampson, author of the book “Private equity as an asset class”, as its interim head of investment strategy as the fund mulls a wider alternatives programme and a potential allocation to private equity.

Fraser-Sampson has in the past advised a number of institutions on their alternatives strategies. He was also formerly the investment controller with the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds and a prominent global private equity investor.

He’s due to advise the PPF’s investment committee, led by  recently-appointed chief investment officer Ian McKinlay, through to September this year.

The PPF was set up by the UK government in 2004 to act as a safety net for the pension scheme members of companies that go out of business. The fund, which recently admitted its 100th pension scheme, has an investment portfolio worth more than £3 billion (€3.4 billion; $4.7 billion).

The PPF’s investment committee will meet at the beginning of June to consider investing in “a wider range of assets” than at present, but “there is no guarantee that a private equity allocation will be agreed at that time”, Fraser-Sampson said.

The PPF currently has the majority of its portfolio invested in bonds, cash and equities. Its only alternative asset holding at present is a 7.5 percent allocation to real estate.

As early as April last year the fund identified one of its most significant challenges as developing a long-term investment strategy to ensure it remains appropriately funded as more schemes’ assets transfer to the PPF.

The appointment of Fraser-Sampson follows a series of senior changes at the UK’s pension lifeboat. As well as Ian McKinlay’s appointment to CIO in March, the fund has hired a new chief operating officer and new chief executive, both since the beginning of the year.

The US equivalent of the PPF, the Pension Benefit Guarantee Corporation, began investing in private equity in December. The process has, however, been tainted by allegations – currently being investigated – of improper conduct in the selection of managers for its $2.5 billion private equity programme.