UK - Leicestershire County Council has appointed two managers to run a target return portfolio, estimated at around £300m for its £1.5bn (€1.75bn) pension fund.

The council tendered the contract in May 2008 when it revealed it intended to fund the increase in the target return strategy through a move out of government bonds with an eventual asset allocation of 65% equity, 15% property and 20% targeted returns funds. (See earlier IPE article: Leicestershire to move out of gilts)

However, minutes from the council's pension fund management committee meeting on 23 January 2009 revealed a new strategic benchmark had been approved consisting of 60% in equity, 15% property and 25% in target return funds, of which 10% is highlighted as being for "credit opportunities".

Leicestershire has now confirmed it has appointed Ruffer LLP and Pictet Asset Management to run the target return portfolio with the performance target in the region of LIBOR + 3-5 % on behalf of the pension scheme.

It added the "timing and extent of the investment has yet to be determined", despite the mandate being valued at around £300m, as the latest summary valuation presented to the committee in May revealed the value of the fund had dropped to £128.9m in the first quarter of 2009 to £1.56bn from £1.64bn in December 2008, and is much lower than the £2.08bn reported in March 2008.

Elsewhere, Suffolk County Council is searching for providers of actuarial advice, a strategic investment consultant and procurement support services for its £1.1bn pension fund.

Suffolk council said it currently has a contract with BT "for the provision of a range of support services, including finance, personnel and IT support", and the administration of benefits from the pension fund is undertaken under this contract by Customer Services Direct - a joint venture between the council and BT.

The tender notice confirmed the successful actuarial adviser appointed to the contract - currently held by Hymans Robertson - would be "required to work closely with the staff of Customer Service Direct in providing actuarial services to the pension fund".

In addition, Suffolk revealed the actuary will also be expected to provide actuarial information to the new strategic investment consultant - employed by the fund to provide advice or assistance on investment strategy, structure and performance analysis - as required for the purpose of advising the fund on its investment strategy

The three roles up for tender are the actuarial adviser, strategic investment consultant and investment procurement adviser, with the deadline for applications set at 3 August 2009.

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