Minors who have received court awards and wards of court should be better off in the future when professional fund managers are appointed to invest their funds later this year.
Some €800 million is held mainly in deposit accounts by the various courts services on behalf of 22,000 minors and wards of court. Up to now these funds have been lodged mainly in low-risk relatively low-return deposit accounts across a number of financial institutions generating a return of about 4 per cent per annum, according to Mr Sean Quigley, director of finance and accountant of the Courts of Justice.
The Courts Service, which manages the €800 million fund, has appointed an Investment Committee to advise on modernising and reforming its management and investment. This committee met for the first time last week. It decided to tender in coming weeks for a long-term investment adviser. This appointment is expected to be made by July and the Committee expects to seek proposals from fund managers for the management of the fund by early autumn.
The Court funds are expected to be split between a number of managers in line with the investment strategy or strategies recommended by the investment adviser.
Fund managers are expected to compete strongly for a slice of the court funds in a highly competitive funds management market. The fund is likely to be split into two or three separate amounts to allow for different investment strategies. Most of the funds should be allocated to fund managers before the end of the year, Mr Quigley said.
In recent weeks the CIÉ €1.2 billion pension fund, one of the biggest occupational pension schemes in the State, which was managed by AlB Investment Managers, was split between three fund managers. Bank of Ireland Asset Management (BIAM), Irish Life Investment Managers (ILIM) and a US group, Capital International, have taken over the management of the funds following applications by a total of 27 Irish and overseas fund managers for the mandates. The Irish Life portion of the fund - €400 million - will be passively managed through its consensus fund while BIAM and Capital will be active fund managers using value-driven investment strategies.
BIAM and Irish Life have been the only Irish managers to be awarded contracts to manage portions of the National Treasury Management Agency €8 billion national pensions reserve fund.
Fees paid to the investment adviser appointed will be met out of the Courts Service budget but fund manager fees will be charged to the funds. "The charges are expected to be minimal and to be offset by improved returns on the fund," Mr Quigley commented.
Reform of the management of the Courts Service awards fund started last November when Mercer Investment Consultants was appointed to review funds' management and funds' accounting and advise on best practice. One of the consultants' fundamental recommendations was that an investment committee be appointed. This recommendation was approved by the board of the Court Service at the end of January and the new committee of 10 met for the first time last week. The committee includes: the president of the High Court, Mr Justice John Finnegan; Circuit Court Judge, Mr John O'Leary; and Judge David Anderson from the District Court.
