IRELAND - The €17.5bn National Pensions Reserve Fund has re-awarded €6bn in two passive equity mandates to the incumbent managers Bank of Ireland Asset Management/State Street Global Advisors and Barclays Global Investors.
"The exercise was motivated by a desire to have more flexibility in the mandates. The mandates under which these managers operated did not give the NPRF the flexibility required to maximise the benefit of those," a spokesman for the fund told IPE.
The current mandates only provided for management against specific FTSE Eurozone and FTSE North American indices. "Under the terms of the re-tendered mandates, the managers will manage against one or more of a number of indices as specified by the NPRF from time to time," a press release stated.
At the London Fund Manager Selection conference last Wednesday, NPRF's Head of Investment Manager Programme, Eugene O'Callaghan, had outlined that the fund was looking for more flexibility within its passive mandates.
He said: "In the past, passive managers were given one specific benchmark. Now it will be much more flexible. Depending on how the active side of a portfolio is made up at any time we will ask the passive managers to manage different chunks of money to different benchmarks at different times."
Similarly, Michael Somers, CEO of the National Treasury Management Agency commented on the awarding of the mandates: "The new arrangements will significantly increase our flexibility in the operational management of the fund.
"They will enable us, where necessary to switch quickly between active and passive management, increase options in defining mandates for specialist active managers and assist in the overall aim of focusing risk on those strategies."
In addition the NPRF will invest a total of €590m in two index plus products benchmarked against the S&P 500 index: one by AIG Global Investment Group (€197m) and one by Barclays Global Investors (€394).
And €190m will go into three pooled currency funds managed by Goldman Sachs, JP Morgan and Mellon Capital Management "in order to introduce a limited amount of active management of the Fund's foreign currency exposure", a press release stated.