In Private Markets, we invest around 30% through carefully chosen fund managers, principally through our Private Equity & Co-Investments team. As described on our Private Markets Group page under the Private Equity Funds & Co-Investments information, we take core positions in leading Private Equity Funds with strong track records of demonstrated value creation. We will also make co-investments alongside our managers with a preference for cash generative businesses with strong market positions.
Each of our fund managers is actively monitored not just on performance but on environmental, social and governance factors and, together with the Operational Due Diligence and Responsible Investment teams, we proactively engage with our fund managers at all levels of seniority to ensure continued alignment to USS’s investment beliefs. Our fund managers are often co-investors on some of our direct assets which helps cultivate strong and mutually-beneficial relationships.
The Investment Product Management (IPM) Team governs the internal and external managers and mandates across the DB and DC schemes. IPM works closely with Head of Investment Strategy & Advice and Heads of Investment Desks to shape new mandate requirements and follow a rigorous investment process: IPM conducts extensive investment due diligence to find the most suitable manager to fulfill the mandate that we believe provides the best value for money for the Trustee.
IPM will also work closely with Operational Due Diligence and Responsible Investment teams to ensure the external managers meet USS’s investment beliefs and requirements.
Each manager is assigned a primary coverage analyst within IPM, who is responsible for ongoing monitoring. All managers and mandates are discussed formally once a month. IPM tends to meet with managers on a quarterly basis and detailed reviews are conducted annually, which typically cover any significant changes in organisation, investment team or investment strategy along with detailed performance attribution and risk analysis & peer comparisons. The team may propose to replace an existing manager when there are concerns the appointment is no longer is in the best interests of USS.
IPM is also responsible for the ongoing relationship management between external managers and USSIM; updating investment guidelines and leveraging the relationship to create positive results for internal teams.