Cardiff seeks emerging markets manager
UK - Cardiff County Council is seeking an emerging markets equity manager to run a specialist portfolio for the Cardiff & Vale of Glamorgan Pension fund.
The mandate is valued at around £25m (€29m), to be split between one or more managers, and the successful applicants will be required to produce an outperformance target of 2% above the MSCI Emerging Markets Index, or similar, over a three-year rolling period - net of fees.
The pension fund's current asset allocation includes UK and overseas fixed income securities, UK and overseas equities, private equity investments, pooled funds, property unit rusts and cash.
However, figures from the latest annual report showed the value of the Cardiff pension scheme dropped £146m in a 12-month period from £907m to £760m by the end of March 2009, following the double impact of falling stock markets reducing asset values and declining gilt yields increasing liabilities.
That said, the report claimed the pension fund's investment strategy "remains focused on the long-term nature of its pension obligations", so equities remain a core long-term investment for both dividend income and capital growth despite the markets falls in 2008.
For example, it noted the "volatility of the markets meant that the fund value had recovered somewhat to £800m at 31 May 2009".
The mandate for a specialist emerging markets manager will be judged on a range of criteria in particular quality, which carries a 50% weighting, while technical merit is worth 30% and prince is 20%.
Cardiff Council, which split a £40m currency mandate for the pension fund between two managers in January, confirmed the emerging markets contract is expected to begin on 1 December 2009. (See earlier IPE article: Cardiff splits £40m currency mandate)
The deadline for applications to participate in the tender is 19 August 2009 and further information can be obtained from bfinance, which is managing the search.
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