(Alliance News) - BlackRock Inc said Wednesday that International Consolidated Airlines Group SA's British Airways has chosen the asset manager to take control of its it pension scheme.
BlackRock will become outsourced chief investment officer for about GBP21.5 billion in pension schemes' assets for Airways Pension Scheme and New Airways Pension Scheme - which serve about 85,000 members.
BA's pensions were previously managed in-house by British Airways Pension Investment Management Ltd.
"The size and scale of the partnership marks a seminal moment in the UK pensions industry. In recent years, regulation has intensified, operational costs have risen, and investment complexity has increased. As a result, many UK pension schemes are looking externally for investment management capabilities with the scale and resources to take on the challenges," BlackRock said.
The New York-headquartered investment manager added: "Alongside these external drivers, the schemes have continued to mature, and their investment needs have changed considerably, requiring an increased focus on managing investments to provide an income that matches members' pension benefits."
BlackRock noted the transition of assets was completed on Tuesday.
Chair of Trustee APS and NAPS Trustee Roger Maynard said: "Operating as our in-house investment manager, BAPIML has delivered excellent investment performance and stewardship of the schemes over many years. This agreement is the necessary next step in the evolution of the schemes as they look to enhance their respective investment strategies, working toward their funding goals.
"In BlackRock, we have identified an asset manager that will ensure the continued focus on delivering enhanced oversight, investment management and long-term value for the Schemes in the interests of our members. We look forward to working with BlackRock in the years ahead."
Shares in IAG were 1.3% higher in London on Wednesday at 209.75 pence each. BlackRock closed at USD876.91 in New York on Tuesday.
By Paul McGowan; paulmcgowan@alliancenews.com
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International Airlines (IAG)