Who manages the funds?
When you become a USS member, you start building your pension with us. But who’s actually looking after your money and deciding where to invest? The answer is USS Investment Management Limited (USSIM). They’re appointed by us to be our investment manager. And together, we have a duty of care to invest your contributions for you.
Investments with you in mind
We make investments with long-term investment goals in mind. That’s because we have a legal duty to invest in the best financial interests of our members, so that we’re able to pay you the pension you’ve earned.
Find out more about where we invest.
The investment gurus
Our investment managers invest in both Public and Private Markets, giving them a global reach. They manage approximately £75.5bn in assets (as at 31 March 2023) across both the Retirement Income Builder (the defined benefit part) and the Investment Builder (the defined contribution part).
USSIM oversee all our money. They also select and monitor a range of external investment managers to look after some of the money. But the biggest proportion of our investments (between 60% and 70%) is directly managed internally by an expert team of in-house investment managers. That means there are specialists managing your contributions. These investment experts can adapt to the ever-changing markets – and help towards a more secure financial future for you.
How we measure success
To help us measure how well we’re doing, we now use what’s called an investment balanced scorecard, which covers six important categories. Each category includes a new set of measures that assess our investment performance more holistically.
There is a scorecard for both the Retirement Income Builder and the Investment Builder. Each one uses the same six categories but with slightly different metrics. These metrics include a range of quantitative risk and return metrics, and qualitative inputs. The purpose of the scorecards is to take a balanced view of performance against the backdrop of our investment objectives and the interests of our members and employers.
The categories include the return on our assets, the way investment risk is managed, the value our in-house investment team add by actively managing our assets, the quality of investment advice, how resilient our investment portfolio is, and our Responsible Investment ambitions. This last one includes things like reaching Net Zero and the way we integrate Environmental, Social and Governance (ESG) issues into our investment process.
We also closely monitor our investment costs. Having an in-house team means our investment management costs are approximately £137m lower per year than the peer average according to the most recent independent analysis by CEM Benchmarking. This demonstrates the value our in-house investment team provide.
Whilst there are costs associated with having an in-house investment team, they’re significantly lower than what we would otherwise have to pay external managers – and we have achieved strong relative returns over the long-term in a cost-effective way. Over the last five years, our investment management costs are 28% lower than the peer average.
Making Responsible Investments
We’re a long-term, responsible investor with a legal duty to invest in your best financial interests, so we can pay our members’ pensions long into the future. We believe that the way a company is run and overseen, and how it manages its environmental and social risks, like its approach to climate change or health and safety, can reduce risk over time and may positively impact investment returns.
That’s why we consider the financial impact of environmental, social and governance (ESG) issues when invest. More specifically, we integrate financial ESG factors into our investment decisions and engage with the companies we invest in to encourage positive change.
Find out more about Responsible Investment.