UK - Wirral Borough Council has appointed four transition managers to aid the movement of assets in the Merseyside Pension Fund following strategy changes.
The council issued a tender for the establishment of a or a transition manager panel framework agreement in January after the council's pension committee was told there were a number of situations in which the fund may need to move "substantial assets", and specialist transition managers could reduce costs. (See earlier IPE article: Merseyside tenders for transition manager panel)
Wirral has now confirmed that following a selection process, managed by Hewitt Associates, it has appointed BlackRock, JP Morgan, State Street and Legal & General to the roles from a total of 12 applications.
The £3.7bn (€4.3bn) Merseyside scheme had previously employed Legal & General as its sole transition manager, and had most recently been used to hold passive assets earlier managed by Barclays Global Investors (BGI) following the termination of the mandate, at least until new managers were appointed earlier this year. (See earlier IPE article: Merseyside awards equity roles and moves fixed income)
David Crum, investment consultant at Hewitt, said: "The fund decided to make use of the framework agreement since a 'one size fits all' approach was not deemed suitable for appointing a transition manager. With the framework agreement, the fund now has choice and flexibility over which manager to use for each specific asset transition."
The framework agreement employed by the scheme, which has 90,000 members, has been awarded for an initial period of four years, with the option of a further two-year extension if required by the council.
Crum added: "The establishment of the framework agreement is not a prelude to major reorganisation of the fund's asset allocation or investment management structure, but merely reflects the complexity of the fund's investment management structure and its monitoring programme."
Latest figures from the scheme's annual accounts revealed an investment return of -17.7% in 2008-09 caused the fund to drop around £800m over the year, as its alternative assets portfolio produced an "extremely disappointing" performance. (See earlier IPE article: Merseyside drops 17.7% in 2008-09)
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