UK - The £4.1bn (€4.4bn) Merseyside pension fund has retained its two fixed income managers to run a portfolio valued at around £372m, or 9% of the scheme's assets.

Existing managers Schroders and Legal & General have retained their mandates for active unconstrained UK fixed income portfolios, following a formal review and tender process organised by Hymans Robertson.

The two managers were first appointed in 2003 and a spokesman for the fund confirmed the review was part of the pension fund's standard contractual terms as the original contracts were for a period of three years with an optional three year extension, and it was now nearing the end of the 6-year period.

Peter Wallach, head of Merseyside Pension Fund, said the scheme conducted an open tendering process for the mandates and were able to "rigorously test the market to see what was on offer that could meet our specific requirements".

He added: "From this process it emerged that our incumbent managers still provided the best fit. We continue to have confidence in the investment process and philosophy of both Schroders and Legal & General, the quality of the teams in place and in their ongoing excellent standards of client service."

The pension fund currently allocates around 20% of its strategic benchmark to fixed income, although index-linked gilts passively-managed by L&G also comprise around 12% of the allocation in a separate mandate.

The two active mandates awarded to Schroders and L&G have a target outperformance of 1% (on a 3-year annualised basis) against a bespoke composite benchmark consisting of sterling gilts and corporate bonds.

Merseyside has so far only reviewed the fixed income portfolio, however because many of the incumbent managers were appointed around 2003 the fund suggested the reviews, which form part of the fund's standard monitoring process, are likely to be ongoing.

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