LGPS Central, an investment pool established to manage the assets of eight Midlands-based local authority pension funds with some £50bn (€57.8bn) in assets between them, is seeking to appoint asset managers to invest a potential £1bn (€1.2bn) in global sustainable equities.

Using the IPE Quest service, LGPS Central said that partner funds had expressed an interest in investing in global sustainable equities.

The pool has decided to set up three investment strategies – Broad, Thematic and Targeted – each as a sub-fund of the LGPS Central Authorised Contractual Scheme.

Therefore, LGPS Central is seeking to appoint investment managers to each sub-fund in the Global Sustainable Asset Class through three separate procurements.

It is expected that the sub-funds will be launched in the second half of 2021, it added.

Bidders are permitted to respond to a maximum of two procurements for the Global Sustainable Asset Class only.

The pool is looking for global sustainable equity managers that already have a minimum of £100m of external client money invested at 31 March 2021 with a three-year track record in managing the sustainable equity strategy submitted for this procurement, the IPE Quest notice stated.

As a general guideline, LGPS Central said that it is expected that the strategies within each of the sub-funds will:

  • be benchmarked against FTSE All World Index (GBP) (or equivalent);
  • be expected to return performance (net of all fees) above the benchmark of; 1.5%-2.0% per annum for the Broad strategy, and 2.0%-3.0% per annum for the Thematic and Targeted strategies;
  • predominantly invest in global equity or equity style instruments across markets;
  • have certain exposure limits (no single investment above 10% of the sub-fund, no single investment to be more than 5% of the company’s shares in issue, and each strategy sub-fund to consist of between 1-2 separate portfolios depending on commitments);
  • be unconstrained geographically and on an industry basis;
  • be a high conviction portfolio but a reasonable level of diversification;
  • have no leverage taken at the portfolio/fund level;
  • may use derivatives for hedging and efficient portfolio management;
  • have a predominantly liquid portfolio; and
  • have no specific exclusions on investments held within portfolios.

The tendering process for each procurement is a three-stage process that “will be fair, transparent and non-discriminatory,” the investor added.

The procurements will be managed electronically by LGPS Central’s Active Equity Team via the company’s e-procurement platform system, In-tend.

The selection questionnaire must be submitted via the In-tend portal before midday UK time on 18 June 2021. Late submissions will not be accepted.

The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email jayna.vishram@ipe-quest.com.

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