British Airways has appointed BlackRock to manage its £21.5bn pension fund.
The agreement covers the assets directly under management for Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) which serve more than 85,000 members.
The partnership will see the transfer of the schemes’ investment management from its in-house provider British Airways Pension Investment Management Limited (BAPIML) to BlackRock.
BA Pensions’ decision to appoint an external investment manager is the first of its kind in the UK pensions industry at this scale.
Due to recent changes in pension regulation, many UK pension schemes are looking externally for investment management capabilities with the scale and resources to take on the challenges.
BA Pensions said the partnership will position the schemes for the future and provide an income that matches members’ pension benefits.
It added BlackRock, a US investment giant, was selected after a rigorous and competitive tender process.
It said the investment firm’s selection was based “on its deep knowledge and commitment to the UK pensions industry”.
BlackRock added it has designed an investment model with the ability and agility to adapt as the schemes’ investment needs evolve.
The agreement also involved the transfer of employees from British Airways Pension Investment Management Ltd (BAPIML) and some employees of British Airways Pension Services Limited (BAPSL) to BlackRock.
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,…