Shetland Islands Council, the UK local authority, has appointed Capital International to run its £110m (€175.7m) pension fund and is now beginning the process of hiring a custodian for the assets.

The fund was previously managed by Phillips & Drew, which also handles the custody arrangements. An source at the fund said Phillips & Drew lost out despite having achieved the set target over five years despite volatility. He said that the trustees of the fund considered splitting the assets with the two managers but felt the sum was too small.