The London borough of Islington’s pension fund is overhauling its emerging and frontier market exposure while dropping its passive equity managers for the region.

The changes come as the £1.1bn (€1.5bn) fund implements its amended strategic asset allocation (SAA), which will see it reduce exposure to emerging markets to 6%, down from its 7% target.

In a tender notice, the council said the new actively managed mandates would be worth a combined £60m.

The future manager will be expected to build up “significant” exposure to frontier markets.

“At this stage,” the mandate adds, “applications will be accepted from managers that manage equity, bond, multi-asset or other mandates from these markets.”

The pension fund said it would not consider standalone products exposed only to either frontier or emerging markets.

Parties interested in the mandate – which could run for an initial five years and be renewed for a further three – should contact the council by 20 June.

The search for an emerging market manager comes as Islington shifts some of its assets to sub-funds managed by the London CIV, the local pension scheme asset pool that last year appointed four managers to oversee £6bn in London borough equity mandates.

Among the nine sub-funds launched at the time, however, only two are actively managed, and both are for global equity strategies.

The emerging market sub-funds offered by the CIV, managed by Legal & General Investment Management (LGIM) and BlackRock, respectively, are both passively managed.

LGIM is Islington’s current source of passive emerging market exposure.

However, Islington has shifted some of its equity investments to a CIV-launched sub-fund and now invests in an Allianz Global Investors-managed equity sub-fund commissioned by the pool rather than directly with AGI.