UK - Bath and North East Somerset Council has appointed HSBC Actuaries and Consultants to provide full investment consultancy services to the £1.95bn (€2.2bn) Avon Pension Fund.
The council initiated a search for a new investment adviser in November 2008 after the pension fund committee agreed the fund's investment strategy was becoming too complex to continue employing advisers on an "ad hoc" basis. (See earlier IPE article: Avon targets full investment advice)
Following the receipt of seven tender offers, Bath and North East Somerset Council confirmed it had appointed HSBC to take on the five-year contract, based on a range of criteria including resources for service to local government pension schemes, governance service and value for money.
Latest figures from the pension fund committee meeting in March showed the value of the scheme had fallen 3.2% in the fourth quarter of 2008 and a further 5% in January 2009, and as the fund returned -10.6% in the nine months to December 2008 it was estimated the funding level at the end of the year had dropped to 61%.
The committee members confirmed the pension fund had discussed the funding situation with employers "in the expectation that there will be significant cost pressures at the next valuation in 2010".
In the meantime, it revealed, an interim valuation would be carried out as of 31 March 2009, after which officials will "explore options for managing the anticipated impact on the employer contribution rate with the actuary".
Elsewhere, the London Borough of Hackney is seeking two active global equity managers for its £596m pension fund.
Hackney, which revealed a funding level of 56.8% at the end of December after its deficit increased from £198m in March 2007 to £453m by the end of last year, is offering two mandates valued at between £100-125m each.
The mandates will be benchmarked against either the FTSE All-World or MSCI All Countries, with the aim of achieving a target outperformance of 2-4 % a year, with the intention that 50% of non-sterling exposure will be hedged on a passive basis,
A decision to offer two new global equity contracts follows a recent asset allocation review of the equity portion of the fund by Hymans Robertson, investment adviser to the scheme, which could also require the appointment of a transition manager to facilitate the restructure of the portfolio.
And Carmarthenshire County Council is offering a pan-European property mandate for its £1.089bn local authority pension scheme following an investment strategy review as its asset allocation at March 2008 was 69% equities, 30% in bonds and 1% in alternatives.
It is now seeking a manager to run a pan-European property mandate valued at around £90m, or 10% of the total fund assets, to be split 50-50 between UK and European properties although the final benchmark and performance target will be decided following discussions with eth successful applicant.
The closing date for tender submissions for the Hackney global equity mandates is 1 June 2009, while the deadline for the Dyfed property portfolio is 8 June 2009. Further information on the contracts can be obtained from the relevant council's procurement department.
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