Driven by Dissatisfaction, Aon Replaces Mercer at UK Pension Fund

(May 3, 2011) — London Borough of Croydon Pension has hired Aon Hewitt as an investment consultant on a five-year contract.

The decision by the $915 million scheme to appoint Aon was fueled by dissatisfaction with the incumbent Mercer coupled with heightened demands by the central government for more efficiency, according to IPE.com. The fund’s contract with Mercer is set to expire later this year.

“We’d had the contract with Mercer for a while. It needed refreshing, and we needed to find out whether we were receiving the best service possible,” Nigel Cook, head of pensions and treasury told the news service. He added: “This doesn’t signal a change in investment strategy, but we hope we’ll get a breath of fresh air from the new adviser. We’re hoping they’ll bring fresh ideas to the process.” An asset allocation review by Aon Hewitt will likely be completed later this year.

The UK fund’s current asset allocation, according to Pensions & Investments, is 50% global equities, 30% global bonds, and the remainder invested in alternatives, including real estate, hedge funds and private equity.