Mandate roundup: Lothian, BlackRock, Baillie Gifford, Invesco Perpetual, Lewisham, Investec
EUROPE - The €3.5bn Lothian Pension Fund will award a £350m (€401m) Asia Pacific equity mandate to two asset managers, with BlackRock Investment Management retained as part of the framework agreement.
The mandate, awarded for a maximum of 10 years after a tender was published in February, targets an outperformance of the MSCI Asia Pacific index over a three-year rolling period.
The LGPS has asked Baillie Gifford and Invesco Perpetual to manage the mandate on their behalf, with Baillie Gifford given two-thirds of the allocation that was aimed at amounting to 8.5% of total fund assets.
The asset manager was previously solely responsible for Lothian's pan-Asia Pacific equity mandate, with the contact set to expire at the end of last month.
Invesco will oversee the remaining one-third of the portfolio.
Meanwhile, the local government pension scheme (LGPS) for Lewisham has awarded an approximately £35m commodities mandate, following a search first launched in late 2009.
The LGPS, which saw its deficit increase to £230m according to its latest triennial valuation last year, awarded the mandate to Investec Asset Management as part of a revised strategic asset allocation, first agreed in June 2009.
Under the agreement, the investment committee retains the right to suspend the investment at times when the commodities market is not performing as well as hoped.
In the award notice, the scheme said: "It is envisaged that funds under management could be invested for only two years, with a suspension of up to a decade if commodity markets do not offer value."
Lewisham borough's scheme currently manages £715m in assets, with this year's switch to CPI as the measure of inflation reducing its deficit by nearly £65m.