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Mandate roundup: Merseyside, State Street, Norfolk County Council, Teesside, BNP Paribas

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  • Mandate roundup: Merseyside, State Street, Norfolk County Council, Teesside, BNP Paribas

UK – The Merseyside Pension Fund has selected a new manager to oversee nearly 30% of its £5bn (€6bn) in assets, replacing existing asset managers Legal & General and UBS.

State Street will now oversee a £1.4bn passive mandate, successfully beating three other contenders for the five-year award that could be extended to run for a decade.

Merseyside confirmed that UBS and L&G’s mandates had been long-standing contracts in need of re-tendering, and that it had not been dissatisfied with their performance.

State Street will now be responsible for a £400m UK equity mandate, as well as a £400m North American equity portfolio and £600m in UK gilts – benchmarked according to the UK equities FTSE All Shares index, its All-World North America counterpart and the UK Index Linked Gilts FTSE UK Gilts Index Linked All Stocks.

According to the fund’s most recent annual report from March, it had been responsible for a £575m UK index-linked gilts portfolio on behalf of Merseyside, as well as a £410m UK equity mandate. UBS oversaw a £401m US equity tracker mandate.

In minutes from a summer meeting of the Wirral pensions committee – the local authority responsible for administering the local authority fund – it was further decided that other existing managers BlackRock, M&G, Newton Investment Management and TT International would remain in place, with a three-year contract renewal extended to all.

Mercer oversaw the tender process, launched in July.

In other news, Norfolk County Council has officially launched a tender for an investment consultancy framework agreement accessible to all local authority funds.

The framework agreement, done in conjunction with six other local authorities, is the first of two that would also cover custody arrangements, according to Norfolk Pension Fund head Nicola Mark.

Interested parties are asked to fill out a pre-qualification questionnaire from which a shortlist of 12 investment consultants will be selected to tender to join the framework.

The four-year framework would allow appointments to be effective for no longer than seven years, with additional information about the process available from Norfolk.

Investment consultants have until 26 November to apply.

Meanwhile, another UK local government occupational pension scheme, the Teesside Pension Fund, has selected BNP Paribas Securities Services to provide global custody, monthly valuation and foreign exchange services.

Teesside – which has £2.5bn of assets including UK and global equities, bonds and direct property and is administered by Middlesbrough Borough Council – said it selected BNP Paribas based on its “safety” as a global custodian and its “extensive” range of services.

Additionally, the UK pension scheme stressed that the bank’s mandate was to provide global custody, but there was scope to expand the relationship into securities lending and advanced portfolio monitoring and reporting.

The mandate represents a coup for BNP Paribas, which has been selected over Northern Trust, which was previously in charge of providing custodian services to Teesside.

Paul Campbell, head of investments at the Teesside Pension Fund, said: “Our most important considerations in appointing a new custodian were the safety of our assets, the strength of institution and their quality of service.

“We reviewed several custodians operating in the UK and found BNP Paribas to be the best fit based on our selection criteria.”

Lastly, Aviva Investors has been appointed by the £2.5bn Rank Hovis McDougall pension fund to manage a £100m real estate mandate.
 
The fund, now with its parent company part of the Premier Foods group, has selected the manager’s real estate multi-manager team to oversee the money, bringing its global assets under management to £5.5bn.

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