Lincoln tenders e190m active fixed income mandate
UK- Lincolnshire County Council’s £615m pension fund has put out to tender a £120m (e190m) active fixed income mandate, funded by a reduction to its UK equity portfolio.
“Following an assets and liabilities study, which we carry out every three years, it was decided to switch £40m out of equities and into fixed income,“ says David Forbes, investment manager at the local authority.
The fixed income portfolio, currently managed by Morley Fund Managers, targets a strategic benchmark of around 9.5% of the £615m pension scheme, of which 1% is invested in corporate bonds.
Says Forbes: “now the fixed income portfolio will account for around 18.5% of the scheme’s assets, and it will be dominated by corporate bonds – around 10% of the 18.5% will be allocated to corporate bonds. Morley performed to our satisfaction, but the fixed income portfolio is now a completely different animal, and we are looking for the right manager.”
The £40m being switched into the fixed income fund will be from the UK equity fund, which is also seeing 5% of its assets moved to overseas equities. The UK equity fund is partly managed on an index-tracking basis in-house, and partly managed actively by Deutsche Asset Management.
Lincoln County Council is looking for one manager, with the possibility of appointing two. Applications are expected by the end of the year, with a beauty parade expected to take place next spring.