Yesterday in the media was the news that Vodafone was selling its 45% in Verizon Business, returning £84 Billion to Vodafone PLC. I thought I would look closer into Vodafone.

It is only you look at the pension fund of Vodafone, one realises how “young” this company is.  [http://www.vodafone.com]

Vodafone was subsidiary of Racal and in the early 1980’s was known as Racal-Vodafone and was spun out of Vodafone in the early 1990’s to become a standalone listed business. Fast forward on to today, and it is the UK’s 2nd largest company in the FTSE-100. A great success story from the late Ernie Harrison who handed the baton over to Chris Gent.

If you look at the annual pension report [http://www.vodafonepensionsupdate.co.uk/documents/vodafone_pensions_report_2012_clickable.pdf] this is when you understand the “youth” of the company.

 A fund of “only” £1,078,838 = £1.078 Billion (BT’s fund is £38 Billion).

Incredibly only 1796 people are claiming a pension from the fund, 13,726 deferred members (people who have benefits in the Scheme but have not started to take them.)

In total only 15,522 people.

The £1.078 Billion is split over 5 asset classes:

7.6% in UK Equities

55.7% in Overseas Equities

31.6% in Corporate Bonds

4.8% in UK Government Bonds

0.3% in Cash

Interesting to see the over 60% exposure to Equities, as the facts are simple, with only 1796 claiming pensions, the need for fixed income securities to finance these commitments is relatively low. Having exposure to equities that in general over the longer term give higher returns, means the fund has time to grow to fund the future pensions of the 13,726 future pensioners.

Vodafone PLC, just over 5% of the FTSE-100