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IPE Quest: Austrian pension fund tenders €40m absolute return mandate

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  • IPE Quest: Austrian pension fund tenders €40m absolute return mandate

IPE QUEST - A Swiss investment consultancy is looking to award a number of mandates, including two on behalf of an Austrian pension fund, using IPE Quest.

The first of three searches being conducted by the Swiss firm, QN1131, seeks to invest a maximum of CHF40m (€29m) across as many as four emerging market mutual funds.

The consultancy will also consider a publicly available pooled vehicle, but does not state any preference on investment approach.

However, the MSCI emerging markets index should be used as a benchmark, with net dividends reinvested, while returns should look to outperform the index once cost has been deducted.

All currencies will be considered, although a preference for US dollars, euros or Swiss francs is stated, with no restrictions on currency hedging should it be employed.

Parties interested in managing one of the CHF10m funds should have at least five years of experience within the specialist field and submit their performance for the five years up to 30 September.

The second mandate, QN1132, is being advertised by the same Swiss investment consultancy on behalf of an Austrian pension fund seeking to invest €40m into a balanced, absolute return portfolio.

The unrestricted mandate allows hedge fund exposure. The former, as well as equity and non-governmental bond exposure, can account for 70% of the value, while an additional 20% can be allocated to real estate investments.

The remaining 10% must be invested in either government bonds or cash, while almost a third of all money must be invested in non-euro currencies.

All reports must be compiled so that figures are in the European single currency.

Any investment vehicles must be tax transparent in Austria, while financial futures can be used for speculative purposes if they do not exceed 10% of investments. Further unlimited exposure to futures or options is permissible if required for hedging purposes.

There should be no negative return when averaged out over a one-year period, while the net targeted return is 4% per annum.

The final mandate, QN1133, is again for an Austrian pension fund, employing identical objectives of 4% return per annum, using a balanced absolute return portfolio.

However, this restricted investment of €40m allows for the total value to be invested in bonds, with specific requests made that public mortgage bonds only from issuers Austria, Germany, France or the Netherlands be considered.

These bonds should not exceed 70% of total fund value and should have at least an A rating and be issued either in euros or hedged against euros.

Other investment approaches can include money market instruments, which again can account for as much as 70% of fund value, while corporate investment-grade bond exposure should not exceed 40%.

High-yield, non-investment grade bonds and emerging market bonds may make up 10% of the fund's investment. However, this 10% should be counted toward a 40% limit placed on equity exposure.

Finally, public mortgage bonds, money market instruments, high-yield bonds, emerging market bonds and equities together may only account for 70% of the €40m fund.

Additionally, high-yield and emerging market bonds may only be used if they are acquired via investment funds that are tax transparent in Austria, while real estate is not welcome as part of the investment strategy.

As with mandate QN1132, futures may form as much as 10% of exposure if used for speculative purposes, while an unlimited exposure is permissible if employed for hedging purposes.

Applicants for both QN1132 and QN1133 should provide their last five years of performance to 30 September, while companies interested in the latter mandate should bear in mind that the restrictions are mandatory and must be followed at all times.

Submissions should be made no later than 29 October.

The IPE.com news team is unable to answer any further questions about IPE Quest tender notices to protect the interests of clients conducting the search. To obtain information direct from IPE Quest, please contact Jayna Vishram on +44 (0) 20 7261 4630 or email jayna.vishram@ipe-quest.com.

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IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2543

    Asset class: Search of an Asset manager / Advisor managing / Advising a risk-based equity derivatives overlay program.
    Asset region: Global Developed Markets Equities, Global Emerging Markets Equities, Swiss Equities.
    Size: CHF 700-2100 million.
    Closing date: 2019-06-17.

  • QN-2544

    Asset class: Transitional Real Estate Debt.
    Asset region: North America (USA/Canada).
    Size: $50-100mn.
    Closing date: 2019-06-17.

  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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