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Mandate roundup: Durham, BlackRock, Edinburgh Partners, IPE-Quest

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  • Mandate roundup: Durham, BlackRock, Edinburgh Partners, IPE-Quest

GLOBAL - The English local authority fund for Durham is tendering nearly 40% of its £1.8bn (€2.2bn) in assets, seeking to appoint four managers to invest in global and emerging market (EM) equities.

According to the tender, the council would prefer global equity strategies “which aim to outperform market-capitalisation weighted indices” instead of strategies benchmarked on economic cycles in the various markets, splitting between 10% and 27% of the £700m allocation over as many as three managers.

The local government pension fund currently invests 28% of its assets in global equities, split nearly 60:40 between Edinburgh Partners and BlackRock.

The fund noted that it would consider other global equity strategies, especially ones with a “significant” bias towards emerging markets.

The either active or quantitative strategies put forward by the global equity managers could be used in place of a fourth, and separate, emerging market equity mandate worth around £180m, if a successful standalone EM manager were not found.

At the time of publication, Durham had not responded to questions from IPE on whether a separate EM mandate meant it had changed its strategic asset allocation (SAA).

According to the fund’s statement of investment principles from August, its SAA allowed for 28% of externally managed assets invested in global equities and a further 20% in UK equities.

The remaining assets were divided up between a global bond and an investment-grade sterling and non-sterling fixed income allocation, as well as 8% in global property and 8% for a dynamic asset allocation allowing for all major asset classes.

Edinburgh Partners, currently responsible for a 21% actively managed global equity allocation, is allowed to invest as much as 10% of its assets in emerging markets within MSCI’s EM index universe.

The 7% passively managed global equity mandate overseen by BlackRock invests according to the market capitalisation of the FTSE All-World Developed index.

However, additional EM exposure is currently gained through the bond portfolios managed by Baring Asset Management and AllianceBernstein, allowed to invest as much as 15% and 20%, respectively, of its mandates in EM debt.

Managers able to manage the assets in a segregated or pooled account can bid for the nine-year contract, including two renewals, until 17 November.

Meanwhile, a European institutional investor is looking to appoint a manager for a $100m (€77.5m) EM equity mandate, using IPE-Quest.

Search QN1260 is being conducted by a European investor seeking exposure to global small and mid-cap equity in emerging markets.

For the active mandate, companies should employ the MSCI Small & Mid-Cap index as benchmark, with firms expected to manage at least $500m in assets in similar mandates and a total of $2bn across its entire portfolio.

The firm must further have at least five years’ experience in the market, stating its performance, gross of fees, to the end of September.

The deadline for applications is 26 October.

The IPE.com news team is unable to answer any further questions about IPE-Quest 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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