UK - The £1.49bn (€1.88bn) Royal County of Berkshire Pension Fund has confirmed its intention to move into emerging market debt and infrastructure with the issue of two new manager tenders.
As the administering authority for the pension scheme, The Royal Borough of Windsor and Maidenhead is searching for an active manager to run a segregated portfolio of infrastructure related assets valued at around £90m.
In addition, it is also seeking an active manager to be responsible for a portfolio of emerging market debt, valued at approximately £70m, which will consist of both local currency debt and external market debt, although the council highlighted that external market debt currency exposure "should preferably be hedged into sterling".
It is expected between five and eight managers will be invited to participate in the tender for each contract, both of which are for a minimum of three years with the option of an annual extension for a further three years.
Figures from the latest triennial valuation of the pension fund - as of March 31, 2007 - showed the scheme had assets of £1.49bn and a deficit of just £879,000, making it 99.9% funded.
The scheme's target asset allocation, according to its funding strategy statement, is 70% equities, 19% bonds, 10% property and 1% cash, although at the time of the valuation the scheme was slightly underweight in equities at 64% - 42% UK and 22% overseas - and it had already reached its 10% target for property investment.
In addition, the pension fund revealed earlier this year it had withdrawn its search for a manager to run an Asia-Pacific portfolio valued at around £80m. (See earlier IPE article: Berkshire withdraws Asia-Pacific search)
The deadline for applications for both the infrastructure and the emerging market debt contracts is August 8, 2008.
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