Avon tenders £136m global equity portfolio

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  • Avon tenders £136m global equity portfolio

UK - Bath and North East Somerset Council are seeking a global equity manager to run a specialist portfolio for its £2.5bn (€3bn) Avon Pension fund.

In January, the council highlighted plans to rebalance its equity asset allocation from 60:40 in favour of UK equities to 45:55 in favour of overseas equities.

At the end of March 2010, the asset allocation of the fund included 28.1% in UK equities and 34.9% in overseas assets. (See earlier IPE article: Avon PF eyes global and emerging markets equities)

Bath and North East Somerset have now initiated a tender search for one or more managers to run specialist portfolios of global equity assets valued at £136m.

The mandates will be benchmarked against the MSCI All Country World index, with a rolling three-year outperformance target of 2-4% a year net of fees.

The contract is for an initial period of five years, and the council noted the pension fund is working towards achieving the UN Principles of Responsible Investment standard and therefore will take this into consideration when evaluating the tender.

Meanwhile, the minutes from the latest meeting of the council's pension fund investment panel in May showed committee members had agreed to move forward with plans to select an active currency investment manager.

The mandate is expected to be a non-discretionary quantitative approach to implementing an active currency-hedging mandate over all US dollar, euro and yen-denominated equity assets. 

This, however, will exclude emerging market investments.

The closing date for tender submissions for the global equity mandate is 9 August.

Further information can be obtained from the council's procurement department.

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