Two UK county councils - Northamptonshire and Cambridgeshire - are searching for new investment managers for pension funds in the wake of poor portfolio performance under Gartmore, one of the incumbent managers at both.

Northamptonshire County Council says it is looking for someone with proven expertise in balanced funds to steer a £260m ($435m) portfolio. The portfolio, which forms one part of the £560m pension fund, is currently managed by Gartmore.

We have been concerned about recent performance, but we are asking Gartmore to reapply," says Stephen Wood, assistant director of finance at Northamptonshire. PDFM manages the county's second balanced pension fund portfolio, and there are no plans to make any changes here.

Wood says the authority debated whether to change the structure of the portfolio, and start using specialist managers, but decided to stick with the balanced approach. However a new manager might use a different philosophy, he says.

Neighbouring authority Cambridgeshire invited investment managers to tender for two mandates to handle actively-managed multi-asset discretionary portfolios worth around £260m each. Director of resources David Earle says the search is part of a process of periodical review. "It's a long time since we've market tested," he says.

But he admits the recent disappointing performance of current investment manager Gartmore has been a factor. Morgan Grenfell, which manages the second balanced portfolio for Cambridgeshire, has been performing very well, Earle says. Both current managers will be able to compete for the new mandates, he says.

Final decisions on the appointments at both authorities are due in July."