UK - Cornwall County Council is seeking a passive global equity manager to run a new portfolio for its £823m (€951m) pension fund.

The council is offering a passive global equity portfolio valued at around £50m, although the tender notice highlighted the mandate could be "broadened at some future point to include other asset classes also to be managed on a passive basis".

Vic Lush, a spokesman for Cornwall county council, said the mandate is a "completely new brief", and confirmed the fund already invests in global equities through specialist managers.

Figures from the pension fund's annual report for 2007-08 confirmed at the end of March 2008 the scheme was invested in global equities through mandates run by Newton Investment Management and Capital International, while Alliance Bernstein was appointed in 2006 to manage a global unconstrained equity portfolio alongside a specialist UK active mandate.

Lush also confirmed the value of the fund "is believed to be, in the current market conditions, £823m", which is a significant fall from the £1.005bn recorded in the annual report at the end of March.

The pension fund's annual report also confirmed the asset allocation in 2008 was 36.8% in overseas equities and 24% in UK equities, with 12.2% in bonds, 9.2% allocated to property and 3.4% in private equity, while the remainder is split between cash - 4.2% - and 9.9% in other investments including hedge funds, infrastructure and currency.

Councillor Michael Burley, chairman of the pensions committee, stated in the report: "In October 2008 a series of unprecedented events brought about a serious loss of confidence in financial markets. The Cornwall fund like many other pension funds suffered under these difficult times to the extent that we saw at the end of October nearly a fifth of the fund's value was eroded."

However, he added as many private sector pension funds struggle to survive, the Local Government Pension Scheme (LGPS) "continues to deliver a good quality pension package", and claimed the changes to the scheme, such as cost sharing, is a way forward to "ensure current benefits can continue to be enjoyed".

Burley said: "The cost of meeting ever growing pension liabilities particularly with people living longer is not sustainable unless new avenues of funding are found. Employers cannot continue to meet the extra demand and therefore employees will either have to pay more or decide to accept a lower level of pension. This will be a tough decision for all and with a consultation exercise on the horizon it is not an issue we can ignore."

The closing date for applications for the passive global equity mandate is 26 January 2009, with the contract expected to begin on 1 April 2009.

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