The Merseyside Pension Fund has appointed four transition managers as it looks to implement a drastic overhall of its asset allocation – and managers – over the next four years.

The £5bn (€6bn) fund, one of the largest local government funds in the UK, announced its intention to appoint a raft of transition managers late last year.

It has since appointed BlackRock, State Street, Citigroup Global Markets and Japanese bank Nomura.

The managers have been appointed on a four-year contract, running under a framework agreement to be utilised as and when the fund requires transition services.

Merseyside said it would be reviewing its investment arrangements and expects to make amendments to its asset allocation and investment managers over the next four years.

It added that, because its asset allocation contains a diverse range of assets and asset managers, it will require different transition managers for differing situations.

The four appointed transition managers, chosen from a compeititve tender of eight, will now be subject to a “mini-competition exercise” whenever the fund requires transition services.

The appointment will come as a boost to State Street in particular, given recent turmoil at the bank over its transition management services.

Its transition management arm was recently handed a £23m fine from the UK financial regulator over “significant failings” in the business.

State Street had been deliberately overcharging six institutions – to the tune of £20m in revenue – the Financial Conduct Authority (FCA) said, as it criticised the bank’s internal controls.

Further to this, a long-standing client, the National Pension Reserve Fund (NPRF) of Ireland, terminated all of its contracts in the aftermath of the fine.

The NPRF, one of the clients to be overcharged by State Street’s UK transition management business, had previously reclaimed €2.65m in non-contractual fees imposed by the bank.