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Denmark's LD Pension awards mandates worth total of €5.7bn

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  • Denmark's LD Pension awards mandates worth total of €5.7bn

DENMARK - LD Pension has awarded 12 investment mandates covering an estimated DKK42.5bn (€5.7bn) worth of assets, nearly four-fifths of the scheme's total value.

Most of LD's assets were previously managed by LD Invest, in which the scheme is a majority shareholder. The company has retained three of the mandates.

The pension fund also put in place almost two dozen framework agreements, allowing it to drop underperforming direct managers without having to re-tender.

Carsten Koch, managing director of the scheme, said the new awards would enable the fund to achieve lower management costs in the long term.

"In the short run, we have not obtained cost savings compared with our present agreement with LD Invest A/S," he said.

"But this agreement could not be continued, and by entering the new agreements, LD will continue to offer a cost-effective solution."

He said if managers failed to deliver adequate returns or provide the quality required on a day-to-day basis, the mandate could be reexamined.

"The framework agreements offer that possibility by undertaking a mini-tender, and this will most certainly contribute to improve performance among the chosen investment mangers."

Along with LD Invest, Nordea Investment Management has been awarded a DKK19.4bn Danish high-grade bond mandate, with BNP Paribas Investment Partners and Fisher Francis Trees and Watt sharing responsibility for a DKK400m global inflation-linked bond portfolio.

Additionally, Nordea will be in charge of a smaller portfolio invested in Danish short-term bonds.

The second-largest portfolio has been awarded to MFS Investment Management and Wellington Management, which were both successful in their applications for the DKK9.3bn global equity mandate.

Both the Danish office of Carnegie Asset Management and LD Invest will manage a DKK6.3bn Danish equity mandate, with Schroder Asset Management in charge of a DKK1.5bn emerging market equity mandate.

Western Asset Management is to manage a credit investment portfolio, while a framework agreement is in place with JP Morgan Asset Management and Wellington AM if the scheme chooses to switch managers.

BNP Paribas and Impax Asset Management have been awarded joint responsibility for a DKK600m fund investing in environment and climate change equity, with the final award again going to LD Invest, which is in charge of a Danish money market portfolio. 

Lønmodtagernes Dyrtidsfond, which has DKK53.3bn of assets under management, first announced its intention to tender the mandates in February and later revealed that more than 100 companies had applied to be an asset manager, with 40 pre-qualifying and able to submit official proposals.

Overall, the 12 mandates were divided among 14 investment managers, along with a further 23 framework agreements.

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