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Mandate roundup: Barking & Dagenham, PPF, Devon, Aviva, Cheshire

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  • Mandate roundup: Barking & Dagenham, PPF, Devon, Aviva, Cheshire

UK - A London local government pension scheme is looking to invest in infrastructure and appoint several new investment managers, as it puts three portfolios out to tender.

The £550m (€616m) London Borough of Barking & Dagenham Pension Fund is looking for managers for its global equity, infrastructure and diversified growth asset portfolios, with two of the three portfolios accounting for more than 10% of scheme assets.

For the new infrastructure portfolio, Barking & Dagenham said it would appoint a manager to invest in both listed and unlisted vehicles, with the view to outperforming inflation over a five-year rolling period with its initial £50m investment.

The £75m diversified growth portfolio was expected to perform similarly to its equity holdings, targeting an outperformance of the retail prices index by 5%, or a 3% outperformance of LIBOR, with total volatility less than two-thirds that of the equity portfolio.

The scheme provided little data about its goals for the global equities portfolio, saying only that the assets should be managed passively.

While it did not reveal the mandate's size, its overseas equity exposure accounted for 40% of scheme assets in 2010.

According to its most recent annual report from March that year, AllianceBernstein Institutional Investments, Goldman Sachs Asset Management, Aberdeen Asset Management and Deutsche Bank's property arm RREEF oversaw portfolio management.

At the time, it invested 7% in real estate. A council spokesman did not clarify at the time of publication whether the infrastructure portfolio would form part of its property holdings, or be viewed as a separate asset class.

Interested parties have until 12 March to apply for the diversified growth and infrastructure mandates via JLT Investment Consulting, while applications for the global equity portfolio should be submitted by the end of February.

In other news, the UK Pension Protection Fund (PPF) is looking to appoint a panel of farmland and timberland managers over the next year, with the aim of investing directly in both asset classes.

It asks that managers offering both asset classes submit proposals separately for timberland and farmland, respectively, stressing that responsible and sustainable management would be key to winning the appointment.

The £9bn lifeboat scheme added: "Proposals focused on investing directly in the soft commodities markets or in agricultural equities will not be considered."

The framework agreement will run for an initial four years, with two potential extensions of two years each, while investments with a life span of as much as a decade are being considered.

Interested parties have until 6 March to apply directly to the PPF.

Meanwhile, the £2.6bn Devon County Council Pension Fund has appointed Aviva Investors as its real estate fund of funds manager, responsible for more than a dozen funds.

The local authority fund put the tender out in May last year, noting that the selected manager would oversee the doubling of its £141m listed and unlisted UK property investments, currently spread out over 13 funds, including £17m invested in Aviva's Pooled Property Fund.

At the time, Devon said it would look to invest £20m per quarter over the next 18 months, bringing its property exposure to 10% of assets under management.

A council spokesman said: "Aviva's knowledge of the current Devon property investments and their clarity on the way the portfolio would be managed going forward gave us confidence that they were the right choice."

The scheme currently also invests £15m each with Threadneedle and Hermes Property Unit Trusts, with vehicles by ING, UBS and RREEF also forming part of its portfolio.

Finally, the £2.8bn Cheshire Pension Fund has put the position of investment adviser - currently held by Hymans Robertson - out to tender, with the successful candidate assuming the role for a five-year period.

In its tender notice, the Cheshire West and Chester council says the new adviser will oversee two full reviews of the local authority scheme's investment strategy, as well as the annual reviews for the three remaining years.

The tender also says the adviser, once it has been appointed in June, should be prepared to consult on appropriate de-risking strategies.

Interested parties should apply directly to the council by 13 March.

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