Kensington and Chelsea's Pension Fund, valued at £1,821,954,000 as of 31 March 2025, saw one of its key investment managers, Baillie Gifford, underperform its benchmark, RBK11-MSCI World ACWI+2%1, by 3.05% for the quarter ending 31 March 2025. According to the RBKC Quarterly Performance Report [6], Baillie Gifford manages 22% of the fund. The underperformance extends over longer periods, with three- and five-year returns falling short of expectations at 6.24% and 6.23% respectively.

Pension Fund Asset Allocation Chart as of March 31, 2025, showing the distribution of assets across various categories like Global Equities, Private Equity, and Real Estate.
Pension Fund Asset Allocation Chart as of March 31, 2025, showing the distribution of assets across various categories like Global Equities, Private Equity, and Real Estate.Source: Pension Board papers, 9 July 2025

The news came as part of the Pension Board's quarterly investment update, which included a fund valuation as of the same date.

As a result of this underperformance, Baillie Gifford has been invited to the November Investment Committee meeting to discuss the reasons behind the figures and the impact of government pooling reforms on active equities. The RBKC Quarterly Performance Report [6] states that the Fit for the Future consultation outlined reforms in asset pooling, UK and local investments and governance. By 31 March 2026, all investment assets must transition to management under six asset pools, reduced from eight, with Administering Authorities retaining responsibility for setting strategic objectives while pools execute investment decisions under FCA regulation.

Baillie Gifford's performance was not the only one discussed in the RBKC Quarterly Performance Report [6]. Other investment managers' performance included:

  • BlackRock MSCI Global Equities Portfolio: Performed in line with the index for the quarter, with a one-year return of -0.08%, below the target.
  • Adams Street Private Equity: Underperformed its quarterly benchmark by 9.34% but outperformed public markets and private equity benchmarks since inception.
  • CBRE Global pooled property: Underperformed by 1.47% as the fund winds down.
  • Active Value UK Pooled Property Fund: Outperformed by 1.24% but is also winding down.

1: The RBKC Quarterly Performance Report [6] states that Baillie Gifford is underperforming against its benchmark, but does not specify which benchmark. The Northern Trust Report included as Appendix 1 to the RBKC Quarterly Performance Report [6] lists the benchmark as RBK11-MSCI World ACWI+2%.