Brunel Pension Partnership – Interview


Cornwall are paying for these invest- ments in isolation, as our other clients are not benefiting from this programme. It went through an elective budgetary pro- cess and we agreed what was needed. Now that we have got this off the ground other local councils are paying attention. Conversations are taking place with these councils: some about housing, some about renewables. We are using the tem- plate that is bespoke to Cornwall in these discussions because it can be utilised any- where due to our internal expertise and leveraging that core expertise – and due to our


existing managers.


This seems to dispel one criticism of pool- ing that impact investing would be difficult as funds cover too wide a geographic area. When I first joined Brunel clients just wanted to invest in infrastructure, there wasn’t a local bias to it. We wrote to Boris [Johnson] and Lord Grimstone [the now former minister for investment] to say you want us to invest in local infrastruc- ture, so please invite us to the table to get the ball rolling.


There are now those who want a local focus. We try to offer it all. That broadly means funds that are global, but where


relationships with asset


there is a want and desire to be local we can facilitate that. It has not been a big problem.


How many funds do you have? We have 17 listed market funds – which is quite a range. We are in the third cycle of private markets, which is private debt, pri- vate infrastructure, private equity, property and secured income. So it covers all the main bases. But if you want something different, then we go through the normal process and present what that looks like, give our view and then create client.


that product for the


Is there anything you cannot fulfil on the investment side for members? We can’t create a passive range cheaper than what the big passive houses offer, of course – we facilitate their offering through an LGPS framework agreement. Actually, our big innovation on passive has really been in RI, as we and FTSE Russell together launched a series of Par- is-aligned benchmarks, and we’ve since transitioned £4bn of client funds to track them.


Looking at the investment outlook, what are your biggest concerns?


We are owned by our clients, who are also our stakeholders, which does not happen often.


There has been so much said about infla- tion, but this is not really an inflation issue. It is more that we are experiencing a changing paradigm. For the whole of my career and beyond we have operated in an environment of disinflationary trends. This means that when most chief execu- tives, politicians and central bankers were training they were taught to fight infla- tion. But they never had to do that. The whole institutional asset management, corporate, government and central bank- ing landscape has not had to deal with inflation for a long time. Some global trends of disinflation have disappeared or dissipated. We have had the introduction of China and emerging


DAVID VICKERS’ CV


January 2021 – Present Brunel Pension Partnership Chief investment officer


November 2013 – November 2020 Russell Investments Managing director, multi asset


July 2007 – November 2013 Sarasin & Partners Partner and fund manager


January 2005 – June 2007 Baring Asset Management Investment manager


August 2001 – January 2005 Rathbone Brothers


Associate Investment manager


markets to the global workforce. That is not happening again. Same with Eastern Europe. The fall of the Berlin Wall and the rest of it integrated a lower cost and work base across Europe. The lion’s share of these trends have come to fruition. We have had a paradigm shift in three months that otherwise would have taken three years. Inflation is good for markets, but it is a digestion issue. What’s happen- ing now is not just about inflation; it is a re-setting of your base risk level. In the short term, markets are in for more down- ward pressure. The silver lining is that this is pushing up yields. Suddenly, your pension liabilities look different. If you are inflation-linked, that will be an issue.


What are your future objectives? The transition is not quite ‘job done’, but, as I mentioned, we are far down that road. What we are thinking about is organisa- tional maturity: we have shifted from four at inception, to more than 60 staff. We have created most, if not all, of the portfolios members want. So we are now asking them what they would like Brunel to look like. We are having those conversations to find out what is next and where we go to hope- fully reach a meeting of minds.


Issue 117 | October 2022 | portfolio institutional | 15


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