The Royal County of Berkshire Pension Fund has sparked what consultants say could be a new wave of pension schemes targeting companies that pay high dividends. Berkshire has just issued for tender a global equities mandate that specifically requires the manager to target high dividend yield. It is the latest sign that investors want companies to increase their dividends rather than find alternative uses for their cash, which can include spending it on mergers and acquisitions.
The £1.5bn pension fund this month started looking for managers to run a £70m diversified portfolio of global equities, delivering an initial dividend yield of at least 130% of the net dividend yield on the MSCI World index. An asset management marketer said: “This is the first time I have ever seen an institutional investor offer a mandate combining the search for high dividends and global equity.”
Source: Financial News
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