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Ir£5bn reserve fund appoints Mercer for strategy

IRELAND - The newly created Ir£5bn (e6.35bn) National Pensions Reserve Fund, the war chest the government hopes will plug the future hole in its social welfare and civil service pension payments, has appointed consultant William M. Mercer to outline the fund’s future investment strategy....

Deborah Reidy, head of investment manager selection at the fund, whose management will be overseen by the Irish National Treasury Management Agency for the first ten years, says the appointment came after two meetings of the fund’s recently appointed management commission:
“ We talked to consultants with similar clients in terms of large funds that they had consulted on strategy and Mercer had a lot of those.”
She notes that the contract will be solely to give recommendations as to the structure of the fund’s portfolio.
“There will be no recommendations on investment managers, only on what the portfolio should look like - in other words the equity/bond split, active/passive split, benchmarks, optimal number of managers and so on and so forth.

Reidy says the management commission will then take Mercer’s findings to a meeting at the end of June and come up with its own conclusions as to what the fund should look like.
“ In early July we will place the mandates that we are shopping for in the EU journal, because we are subject to the EU tendering process.
“ Then we have to begin that entire process of manager selection.

Reidy says the fund will hire a further consultant to give advice on investment manager selection and research.
“ We won’t take everything the consultant says as written though. It is an input into the process.”

Reidy recently joined the reserve fund from consultant William M. Mercer in Dublin where she worked as a senior consultant.



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