The investments will be made through the legal framework of a special alternative investment fund (Spezial-AIF), according to the tender award document.
The mandates will be included as part of the following state institutions’ investment porfolios: the €735m Altlastensanierung des Landes Sachsen-Anhalt – a special fund for the remediation of contaminated sites in the state of Saxony-Anhalt – the €1.1bn Pensionsfonds für die Versorgung und Beihilfen der Versorgungsempfänger des Landes Sachsen-Anhalt, and other state entities and foundations.
The expected investment volume for EM equities is €125m, while for small and mid-cap equities is €90m. The main goal for the mandate award is risk diversification and increased expected returns on the existing portfolio, the document stated.
Frankfurt-based Universal Investment is the financial investment management company, which coordinates with the depositary – BNP Paribas Securities Services – through a centralised system. This means that one service provider performs tasks for all asset classes.
The Spezial-AIF fund has already allocated assets in segments in European equity (STOXX Europe 600) worth €384m, European large-cap equity (EUROSTOXX Large) for €196.6m, short-term bonds for €301.2m, European corporate bonds for €140.4m, and global convertible bonds for €247.9m.
It has also allocated €222m to government and corporate bonds, €70.8m to corporate EM bonds, and €188m to EM government bonds, according to the document.