BELGIUM – The 3.3 billion-euro pension fund for telecoms operator Belgacom has appointed four managers to run a new international equity portfolio.

The diversified international equity mandate is split into two lots. Lot one has an ex-post tracking error of between two and six percent and will be managed by Invesco Benelux SA and MFS International Limited. Lot two does not have a traditional market benchmark and will be managed by Alliance Capital Management LP and Morgan Stanley Investment Management.

The size of mandates has yet to be decided, although a source familiar with the deal estimated the total of both lots to be in the region of 350 million euros. Assets will come from future contributions or a reallocation of assets to be decided by the board.

Belgacom says the managers were chosen as they ranked best under the criteria of: resources, systems, methods, operational and investment process, control mechanisms, performance, and level of fees.

The mandate was put out to tender in December, following a recommendation to increase international equities within the equity portfolio. At the end of 2002, 2.5% of the fund’s assets were invested in international equities. The asset class was the worst performing with a return of –32%. European equities returned –30.7%. Bolstered by Euro bonds, the Belgacom pension fund’s overall return for 2002 was –7.5%.

Over the remainder of this year, Belgacom also plans to assess whether it should be investing in other asset classes in order to further diversify the portfolio.