The Avon pension fund has ditched its allocation to Gars, one of its largest holdings for the past years, pulling almost £240 million from the fund.
In a recently disclosed statement dated to March, the fund's management committee wrote: 'In November 2018, the Aberdeen Standard Investments mandate was terminated over the quarter with the proceeds allocated to the fund’s two other diversified growth funds.'
Gars was the fund's fourth largest holding in March 2017 with a £258 million allocation, or around 5.5% of the portfolio's £4.7 billion in assets. This dropped to 5.1% by June 2018 before the mandate was completely abandoned a few months later.
According to the report, the cash was used to up exposure to the Ruffer Diversified Growth and Pyrford Diversified Growth funds that now hold £360 million and £212 million respectively.
The pension fund, which is part of Bath and East Somerset council, also has holdings in BlackRock passive strategies, Jupiter's Global Sustainable Equities fund and Schroders UK Property fund.
'Manager total returns over the quarter were on the whole negative, with the weakest performance coming from the overseas developed market equity managers,' the report read.
'The fund’s three DGF strategies also posted negative returns, but
provided protection during the equity market downturn and fulfilled their role within the fund’s overall investment strategy.'
It added: 'Over the three-year period all mandates with a three-year track record (except Aberdeen Standard Investments) produced positive absolute returns.'
Late 2018 saw a significant spike in redemptions from the formerly blockbusting mandate, as backers used the catalyst of a management handover as a prompt to pull assets.
Assets in the fund tumbled have from above £40 billion to a recent £10.5 billion. Analysis by Citywire head of fund research Frank Talbot in March calculated that Gars had lost £17.2 billion across UK, European and US versions of the fund since the start of last year.
The outflows come at a time when the performance of all but the most aggressive mixed assets funds have suffered.
Gars has taken the brunt of the outflows, but the reality is that its two closest competitors have been lacklustre when it comes to performance.
Invesco Global Targeted Returns (GTR) and Aviva Investors Multi-Strategy Target Return (Aims) – which were both established by former members of the Gars team – have also suffered outflows over the same timeframe.
However, the figures are much more modest, at £2.3 billion and £1.5 billion, respectively, over the 14-month period. This has led to Gars being usurped by GTR as the largest of the trio of sophisticated multi-asset funds.