LaSalle wins entire £1.6bn UK property mandate for RMPP

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LaSalle wins entire £1.6bn UK property mandate for Royal Mail Pension Plan

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LaSalle Investment Management has won the property mandate on behalf of the Royal Mail Pension Plan (RMPP) and will take over the management of RMPP's entire £1.6bn UK property holdings.

As tipped by Property Week, RMPP, the UK's fourth-largest pension fund, during the last few weeks rounded up a "beauty parade" of property fund managers to pitch for the mandate.

Alan Tripp, LaSalle UK managing director, said: “We are delighted to have been selected by Royal Mail. At LaSalle we are highly focused on maximising investment performance and this year we have delivered exceptional benchmark beating performance for our pension fund clients, many of whom we have worked with for over 20 years. Our success is the result of the depth of our UK platform, one of the largest, most experienced and stable in the UK. We very much look forward to working with the Royal Mail Pension Plan to realise their investment objectives.”

A Hermes spokesman said: "It is very disappointing to lose a mandate from a long-standing client but we fully respect RMPP's decision. Following the challenging market conditions over the last few years we have made a number of changes in our approach to managing large segregated real estate mandates. These follow the principles and strategies that have been applied to clients such as HPUT - a fund that has delivered strong long-term out performance. Our investment platform remains robust and our existing client teams are fully resourced and we believe we are well-placed to develop our third party client proposition."


It is the first time that RMPP has appointed a manager other than Hermes, which it co-founded 27 years ago. Hermes was set up to manage the pensions of the Post Office and British Telecom in 1983, when it was called PosTel. In 1995, the BT Pension Scheme bought the 50% holding in PosTel owned by the Post Office, and PosTel's name was changed to Hermes.

The decision to award the mandate to another party follows criticism that RMPP has failed to respond to falling values and a rising deficit.It has been under severe pressure since the end of 2008, when it emerged that it faced a deficit of between £8bn and £9bn.

The government had considered taking over most of RMPP's assets, including gilts, equities, properties and cash as part of its now-aborted plan to part-privatise Royal Mail. The pensions of retired Royal Mail employees are paid out of RMPP, which is why the growing deficit in the scheme is such a concern.

Rupert Clarke, previously head of Hermes Real Estate, stepped up to chief executive of Hermes in 2008. Since then he has split its two functions: the asset management business that runs funds for a range of clients and the team advising the BT Pension Scheme.

RMPP is being advised by Mercer Investment Consulting.