Most of our investments are managed by external investment managers. We constantly monitor the performance of the investments under their control. The terms and style of management are set out in formal agreements, along with a target for performance. We expect performance targets to be reached over the medium to long term. A fixed term contract is agreed with managers for a time long enough to allow a manager to produce the targeted performance. However, the Fund has the right to end all agreements immediately.
Spreading the investments over different managers leads to diversification benefits: poor performance from one manager has less of an impact on the Fund as a whole. Managers are expected to add further value by choosing stocks wisely.
The managers' responsibilities and benchmarks are noted below: