The investment pooling company for eight local authority pension funds from across central England is looking for global active emerging market bond managers to run a fund of around £900m (€1.1bn).

According to an announcement via IPE’s Quest service, LGPS Central’s current intention is for the fund to predominantly invest in hard and local currency government bonds, and hard currency corporate bonds.

Subject to slight variations as the search process unfolds, the asset pool indicated it expected the fund mandate to include certain exposure floors and limits, the main ones being:

  • At least 50% of the fund should be invested in hard currency sovereign and quasi-sovereign debt
  • Up to 30% can be invested in local currency sovereigns; and
  • Up to 30% can be invested in hard currency corporate bonds

LGPS Central said active management would be expected to achieve net outperformance of 100bp against the benchmark, which is expected to be the JPMorgan EMBI Global Diversified Index GBP Hedged index.

The asset pool is looking for asset managers to be able to demonstrate a “consistent, robust, repeatable, investment process”, with value for money, full transparency and responsible investment among other key requirements.

The tendering process is a three-stage process, with third parties initially invited to tender through a “standard selection questionnaire” process. Successful applicants will then be invited to complete a request-for-proposal before a “competitive” dialogue during final interviews and selection.

The closing date for selection questionnaire submissions will be 12 noon UK time on 23 December.

LGPS Central is responsible for pooling the investments of the local authority pension funds for Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands and Worcestershire. They have around £45bn in assets under management between them.

Scandi EM equity search

Separately, a Scandinavian investor has tendered a $100m (€90m) long-only mandate for investing in the equity of small and mid-cap (SMID) companies in global emerging markets. 

According to search QN-2583 on IPE Quest, the investor wants an active bottom-up focussed investment style, with a tracking error of between 3% and 8%. The benchmark should be MSCI Emerging Markets SMID Cap Index (NR USD).

Applicants should be signed up to the Principles for Responsible Investment or in the process of doing so. When applying they should state performance to 30 September 2019 gross of fees.

The final closing date is 14 January at 5pm UK time.

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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