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PBGC names partners for USD2.5bn investment in private equity and real estate

The US Pension Benefit Guaranty Corporation has selected investment firms BlackRock, Goldman Sachs and JP Morgan as strategic partners to manage USD2.5bn in assets and provide support t

The US Pension Benefit Guaranty Corporation has selected investment firms BlackRock, Goldman Sachs and JP Morgan as strategic partners to manage USD2.5bn in assets and provide support to PBGC’s in-house investment staff.

The PBGC’s strategic partners will manage its allocations to private equity and real estate, asset classes added to its portfolio under the diversified investment policy adopted last February by the PBGC board of directors.

Through the partnerships, the PBGC intends to leverage each firm’s financial, quantitative and qualitative resources.

Director Charles E F Millard says: "Our first criterion for prospective partners was an excellent track record in allocating to private equity and real estate. These firms are world leaders in both fields. Second, the firms had to demonstrate their commitment to a complete partnership. They will be required to share information among themselves and give the PBGC unrestricted access to all intellectual firepower within their respective firms.

"These relationships will benefit the PBGC, not only with private equity and real estate investments, but in risk analytics and mitigation, consolidated reporting and staff augmentation. These resources will put the PBGC on a more strategic foundation for its future."

Laurence D Fink, chairman and chief executive of BlackRock, adds: "Institutional investors at the forefront of best practices are adopting the strategic partnership approach to gain access to world-class intellectual resources. We are proud that the PBGC has chosen BlackRock as a strategic partner to help manage its assets, while also providing best-in-class risk management services through BlackRock Solutions. We look forward to working alongside PBGC’s other strategic partners, Goldman Sachs and JP Morgan, to serve this important corporation and the American workers and retirees it serves."

The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974.

It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in more than 29,000 private sector defined benefit pension plans.

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