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Impact Investing

IPE special report May 2018

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Merseyside tenders European equities

UK – The £3.8bn (€5.5bn) Merseyside Pension Fund is looking for a manager for a £100m European (ex UK) equities mandate.

This mandate was formerly a pan-European brief managed by Wellington Management Company since 2003. A fund spokesperson told IPE that Wellington could reapply for the new mandate.

The scheme is reducing its exposure to UK equities following an actuarial triennial valuation in March 2004, which resulted in changes to its strategic benchmark.

UK equity allocation has been dropped from 36% to 31%. Meanwhile, overseas equity allocation has increased from 22% to 25%, and alternatives have increased from 16% to 18%.

“A typical pan-European portfolio will be approximately 60% European, 40% UK,” said the spokesperson.

“By using the UK equities to fund asset allocation changes, the remaining European equities become, by default, a European mandate. It is for a manager for those that we are undertaking the search.”

The Fund is being advised by bfinance. It hopes to shortlist between four and six European equity managers before a final selection is made. The closing date for applications is April 14.

The investment objective is index + 1% to +2% on a three year rolling basis, net of fees, with a three year investment horizon, said the scheme.

The award criteria are as follows: Quality (50); technical elements (30); and price (20).

At the end of January, the scheme re-awarded two actuarial and investment advice contracts to Mercer Human Resource Consulting following a competitive tendering process. The briefs involve providing basic actuarial valuation work, and undertaking asset/liability studies and asset allocation advice.

The scheme has approximately 49,500 active members, 36,900 pensioners and 18,600 deferred members.

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