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Dorset splits £35m active currency mandate

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UK - Dorset County Council Pension fund has appointed two active currency managers to run mandates valued at £35m (€46m).

The £1.4bn local government pension scheme has awarded a £20m mandate to Record Currency Management, and a further £15m mandate to Auriel Capital Management, both of which came into effect on March 1 2008.

Dorset confirmed in August 2007 it planned to tender a £35m active currency mandate to run alongside its existing passive currency hedge, (See earlier IPE story: Dorset joins currency trend) and in December the fund interviewed five shortlisted managers before deciding to split the mandate between Record and Auriel.

A recent report submitted by the scheme's investment adviser Allenbridge EPIC Investment Advisers (AEIA) to the Pension Fund Investment Committee in February, revealed the £20m mandate awarded to Record will be "equitised" to the S&P 500 and will be funded by a reduction to the global equities mandate managed by Pictet.

Meanwhile, the Auriel mandate will be funded by cash and be benchmarked to seven day LIBOR (London InterBank Offer Rate).

The fund, which had a deficit of £115m to March 31 2007, currently has the majority of its investments in UK and overseas equities, with 28.3% allocated to domestic stocks, and 29.1% in global equities, while 20.3% is invested in bonds.

However, there is also a target allocation of 10% investment in real estate and 4% into private equity, although property is currently only 9% invested and the private equity allocation, managed by Standard Life and HarbourVest, is only 0.8%  invested.

In its presentation to the investment committee in February, AEIA confirmed it would "engage" with the two providers as a result, to establish what funds are available for further investments so the committee can decide on further investments at the next meeting in June.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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