UK – The £2.4bn (€3.5bn) Hampshire County Council Pension Fund is in the process of a complete managerial overhaul as part of a move towards a more specialist approach.
The scheme is currently tendering for “two or more” managers of bond portfolios, “one or more” property portfolio manager, “two or more” UK equity managers and “two or more” global equity managers.
According to a scheme spokesperson: “We could end up with anything between seven and ten managers I think, possibly even more.”
Hewitt is advising the pension fund.
The scheme currently has three multi-asset managers working to a scheme-specific benchmark, and one specialist property manager. The contracts expire at the end of the years and all four managers have been “invited” to apply for the new mandates, said the scheme.
The fund said it wished to emphasise that the review was not a reflection of the performance of the fund's current managers.
The spokesperson stated: “We are moving towards a more specialist approach, which in itself implies more managers.
“We hope that by appointing more managers we can gain access to a wider range of investment styles and skills - in particular we are looking to have some of the smaller mandates managed on an unconstrained active basis, counter-balanced by larger passive or low-risk mandates.”
The fund’s current asset allocation stands at around 70% equities, 25% bonds and 5% property. The probable proposed allocation is 65% equities, 25% bonds and 10% property.
The bond mandates – ranging between £100m and £500m - could vary from passively managed portfolios to unconstrained actively managed portfolios.
The property mandate(s) - £100m to £250m - will be managed on an unconstrained active basis and invested in direct and/or indirect property in the UK and Europe.
The UK equity mandates – pegged at between £100m and £500m – are expected to have varying investment styles.
The global equity mandates – also between £100m and £500m – could include global unconstrained actively managed portfolios, smaller cap portfolios possibly on a regional basis and emerging market portfolios, said the contract notice.
The mandates all run for an initial five-year period with the possibility of extending them to ten years. The closing date is 13 March 2006.