For our U.K.-based reinsurance and insurance operations, Aspen U.K. signed an agreement on April 1, 2005 (following our entry in October 2004 into a heads of terms agreement) with B.L.C.T. (29038) Limited (the landlord), Tamagon Limited and Cleartest Limited in connection with leasing office space in London of approximately 49,500 square feet covering three floors. The term of the lease commenced in November 2004 and runs for 15 years. In 2007, the building was sold to Tishman International but the terms of the lease remain unchanged. The lease is subject to five-yearly upwards-only rent reviews. In September 2014, we entered into an additional lease with Tishman International for a further 14,000 square feet in the same building. The lease will run for a 14-year term. In 2011, we entered into another lease in London for approximately 7,000 square feet which expires in March 2016. In October 2014, we sub-leased this property until expiry in March 2016. We also license office space within the Lloyd’s building in London on the basis of a renewable 24-month lease.
Investment Management. Our investment strategy is focused on delivering stable investment income and total return through all market cycles while maintaining appropriate portfolio liquidity and credit quality to meet the requirements of our customers, rating agencies and regulators. In keeping with our strategy of improving long term investment returns and in light of the ongoing low interest rate environment, we adjusted our asset allocation by increasing our equity exposure by $240.0 million from 5.6% to 8.5% of our investment portfolio. We also sold our $25.1 million BB High Yield Bonds portfolio in May 2014 as we thought the market was expensive and could not find securities that met our portfolio criteria. We continue to maintain a 1.0% position in BB Bank Loans and a 2.5% position in BBB Emerging Market Debt. As at December 31, 2014, approximately 12.5% of our Managed Portfolio was invested in equities, BB Bank Loans and BBB Emerging Market Debt.
Taxes. We recognized a tax expense in 2014 of $12.1 million (2013 - $13.4 million expense; 2012 - $15.0 million credit), equivalent to a consolidated rate on income before tax of 3.3% in 2014 compared to 3.9% in 2013 and 5.1% in 2012. The effective tax rate has reduced in 2014 due to the reduction in U.K. corporate tax rate from 23% to 21% and in 2013 due to the reduction in U.K. corporate tax rate from 24% to 23%. The tax in each of the years is representative of the geographic spread of our business between taxable and non-taxable jurisdictions in such years.
Dividends. In April 2014, the Board approved an increase in the quarterly dividend on our ordinary shares from $0.18 per ordinary share to $0.20 per ordinary share (2013 - $0.18 quarterly dividend; 2012 - $0.17 quarterly dividend). Dividends paid on the preference shares in 2014 were $37.8 million (2013 - $35.5 million; 2012 - $31.1 million). The increase in the dividends paid in 2013 was due to the additional issuance of a series of preference shares on May 2, 2013 for $275.0 million and issue expenses of $4.4 million, offset by the redemption of the 5.625% Perpetual PIERS on May 30, 2013 for which dividends are no longer paid. The further increase in 2014 reflects a full year’s dividend on the preference shares issued in May 2013.
The total group general and administrative expense ratio includes corporate expenses. In 2014, corporate expenses included $28.5 million of costs associated with the unsolicited approach from Endurance.
Income before tax. In the twelve months ended December 31, 2014, income before tax was $367.9 million (2013 - $342.7 million; 2012 - $295.4 million), comprising the amounts set out in the table below:
The increase in reinsurance recoverables in 2014 is due to the recognition of current year recoveries for our insurance lines of business which purchase both facultative but also proportional reinsurance. The recoveries in the reinsurance segment are generally associated with natural catastrophes and due to the low level of this type of event in 2014 and 2013 the reported balance is reducing as recoveries are collected for 2012 and prior catastrophes.