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Impact Investing

IPE special report May 2018

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Mandate roundup: IPE-Quest, Cornwall, Permal, JLT, VER, BNY Mellon

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A Swiss institutional investor is seeking a manager for a $50m (€37m) multi-asset-class mandate exposed to hedge funds, using IPE-Quest.

Search QN1424 did not place any geographic restrictions on investments for the mandate but said the liquid absolute return strategy should be cost-efficient, only involving a single layer of fees.

The initial investment, which could increase above the $50m committed, should be invested in a liquid, transparent and scalable strategy, the client said.

The selected manager should act as an intermediary between “a long-only unleveraged balanced mandate and a fund of hedge funds”, it continued, stressing that it should be focused on diversification and seeking out alternative risk premia.

It said the strategy should have a limited correlation with the equity market as a whole, and ideally complement a traditional balanced mandate, comprising equities, fixed income and direct real estate.

Any applying firm should have at least $200m in assets under management and a three-year track record, with the volatility of any mandate not exceeding 10% while achieving annual returns of 4-8%.

Interested parties have until 9 July to answer the request for information.

In other news, the £1.3bn (€1.6bn) Cornwall local government pension scheme (LGPS) has tendered a £100m hedge fund mandate in an attempt to increase its exposure to the asset class significantly.

According to the fund’s administering council, it will consider either a hedge fund adviser or a managed account platform provider to oversee the investment.

The LGPS said it would consider any hedge fund adviser with experience placing $3bn in assets over at least five years – although it added that it would look at the past performance of the company’s management team if garnered at a previous employer.

The manager will be expected to build a concentrated hedge fund portfolio and assist with strategy for the asset class and the LGPS in launching a standalone vehicle for its assets.

Further information can be obtained from JLT Investment Consulting’s Manchester office, with applications welcome until 5 August.

The local authority scheme currently invests in hedge funds through an £18m mandate with Permal, accounting for around 1.3% of assets, well below its 8% strategic allocation.

Through its fund of fund strategy with Permal, the local authority invests in the Jubilee Absolute Equity Fund, which had been on notice due to “performance issues”, according to documents prepared for a March meeting of the council’s pensions committee.

Finally, the Finnish State Pension Fund, VER, has appointed BNY Mellon as global custodian for part of its fixed income and equity holdings.

Tiina Tarma, the fund’s general council, said: “We initiated a transparent review of global custody service providers that ranked candidates on a weighted basis across a range of key criteria.

“A thorough analysis of the results saw BNY Mellon returning the highest overall score, and, accordingly, we have selected the company to be VER’s new global custodian.”

The bank said it would be in charge of around €7.5bn in assets, around 45% of the fund’s total €16.5bn in assets.

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 direct from IPE-Quest, please contact Jayna Vishram on +44 (0) 20 7261 4630 or email jayna.vishram@ipe-quest.com.

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IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

  • RE-2441

    Closing date: 2018-05-31.

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