Greater Manchester Pension Fund (GMPF) is inviting tenders to run its direct UK property portfolio, after deciding to outsource its management.

Property makes up between 6-7% of the fund’s £12.5bn (€14.8bn) portfolio, split evenly between direct holdings and funds.

The aim of the outsourcing of its portfolio was increase both the value of the fund’s property assets and the size of holdings, said Peter Morris, director of pensions, GMPF. He noted that the fund did not possess the internal resource to grow the portfolio in such a fashion.

Morris said: “The planned target allocation to property in the medium-term will be increased to 10%, but delivered in various ways. We expect direct property holdings to be in the range of 4 to 8% of the total portfolio. My expectation is that we will also see an increase in average lot size, reflecting the increase in exposure.”

Although the invitation to tender is for the direct portion of the property portfolio, Morris said it was possible the manager might choose to invest in specialist pooled vehicles for some assets.

“The fund has and will develop other means of obtaining its property exposure, such as Greater Manchester Property Venture Fund, which invests in property development and redevelopment opportunities in north-west England,” he said.

The mandate will run for ten years, with an option to extend by five years, and there will be triennial fee reviews.

Mangers tendering must have minimum direct UK property assets under management of at least £3bn.

The successful manager will be announced in spring next year.