Austria’s BVP awards convertible bonds to MSIM

AUSTRIA – Austrian multi-employer pension fund BVP Pensionskassen has awarded a 30 million-euro convertible bond mandate to Morgan Stanley Investment Management, a type of investment new to the fund.

BVP’s central portfolio manager, Harald Steinbichler, said the 1.1 billion euro fund had tapped MSIM for its track record and for its team, which many of the 16 other candidates who tendered lacked.

“We were impressed by their technical knowledge of this asset class, their strong track record in this area and by the disciplined, clear investment process,” he said, adding that no consultant was involved in the choice.

MSIM will manage the mandate to a benchmark of 30% MSCI All Country World Free Index and the rest to the Merrill Lynch Global Investment Grade Index.

Rondal Powell, vice president of Central European institutional sales at MSIM, said: “This win marks another important step in our progress to growing our European institutional business, and is a clear vote of confidence in our convertibles capabilities.”

A spokesman at the firm said that European pension funds were showing interest in convertible bonds, a form of debt that allows the issuing company to convert bonds into equities after a certain period of time.

The company, the spokesperson said, had made convertible bonds available to intermediaries two years ago.

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