London’s Greenwich local authority fund is tendering a £100m (€139m) emerging market (EM) equity mandate as it continues to implement its new strategic asset allocation.
The actively managed mandate, which accounts for the 10% target allocation to EM equity envisaged under Greenwich’s new investment strategy, would be awarded to a single manager.
Any manager would be expected to outperform the MSCI EM index by 2-4%, placing the funds invested into an existing pooled vehicle.
Asset managers should register their interest for the 10-year contract by 3 February.
The £1bn fund for the Royal Borough of Greenwich last year agreed a new strategic asset allocation with the aim of diversifying its investments.
| Greenwich strategic allocation | |
|---|---|
| Asset Class | Target |
| UK equities 5% cap weighted | 15% |
| Overseas Equities | 35% |
| Global equity passive | 15% |
| Smart beta | 10% |
| Emerging markets active | 10% |
| Property | 10% |
| Bonds | 20% |
| Multi-asset credit | 10% |
| UK Aggregate Bond Fund | 10% |
| Multi-asset strategy | 10% |
| Diversified alternatives | 10% |
Previously drawing its equity exposure from a UK equity and a general overseas exposure accounting for 45% of assets, the local government pension fund instead agreed to allocate 15% to UK equities and a further 35% to overseas equities.
The overseas exposure includes the 10% target allocation to emerging market equity but also a 15% passively managed global equity mandate and a 10% exposure to smart beta strategies.
The UK equity, passive global equity and smart beta allocations were tendered in November last year.
At the same time, the fund also tendered a £100m alternatives mandate, with which it was targeting exposure to a broad range of asset classes – compiling a non-exhaustive list of a dozen asset classes, including EM debt, hedge funds, commodities and insurance-linked securities.
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