Suffolk tenders e47m private equity mandate

UK- Suffolk county council has put out to tender a £30m (e47m) private equity fund of funds mandate, joining a growing list of UK local authorities to re-allocate assets to the alternative class.

Suffolk sought consulting advice from Hyman Robertson, which advised moving 5% of the scheme’s assets out of UK and overseas equities and into private equity. Currently around 70% of the scheme’s assets are invested in equity – 42% of which is invested in the UK, and the remainder in Europe and the US.

The mandate will be awarded to a fund of funds manager, with the search being conducted by Hyman Robertson on behalf of the local authority. It is hoped that the appointment will be made by January 2003, and the portfolio in place by April. Peter Edwards, corporate finance manager at the local authority, says the funds are unlikely to be drawn down immediately, but rather over time.

At present Suffolk’s pension fund is managed by five fund managers. Legal and General manages 37% of assets in an index-tracking portfolio of bonds and equities and Deutsche Asset Management runs an actively managed equity and bond portfolio.

The remaining assets are managed by specialist managers – Société Générale manages around 15% in UK equities, capital International manages 10% in overseas equities and Schroders Property manages 10% of the fund in property fund of funds.

Says Edwards: “private equity offers prospects of good long-term returns. Reallocating assets to this area will diversify our asset classes. We will consider investing in UK, European and US private equity.”

Suffolk joins other local authorities Enfield, Hertfordshire, Lincolnshire, Cambridgeshire, Shropshire and Nottinghamshire in reallocating its assets to private equity.

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