UK - Islington Council is seeking one or more managers to run new active UK and global property mandates with a combined value of £100m (€117m).
The pension fund currently has 6% of its assets allocated to a UK property mandate run by Aviva, which returned -4.6% in the first quarter of 2009, but it intends to increase its investment in the sector in line with a revised investment strategy agreed in November 2007.
Islington Council is tendering an active global property portfolio, valued at £50m with a benchmark of UK RPI +5% a year over a three- to five-year rolling period, alongside a £50m active UK balanced property mandate benchmarked against the IPD property index.
The council confirmed mangers can apply for one or both mandates, and while the successful managers will be required to manage the assets in accordance with the Local Government Pension Scheme (LGPS) regulations possible investment types include balanced funds, indirect funds; REITS, quoted property company equities and possibly infrastructure funds.
Although the two portfolios are each valued at £50m, Islington Council said it could "break the mandate into smaller allocations is a greater number of suitable providers are identified", such as two UK property mandates of £25m.
The contract is for an initial period of three years with the possibility of a further three-year extension subject to delivery of performance.
The council originally intended to initiate the property manager search in March 2009, following the appointment of two new global equity managers to run a £250m portfolio, however the search was delayed as the documentation "had to be updated to reflect new procurement regulations and processes". (See earlier IPE article: Islington splits global equity mandate)
Most recently, the pension scheme, valued at £689m in March 2008, appointed Standard Life to run a £150m active UK bonds mandate. (See earlier IPE article: Islington awards UK bond mandate)
The closing date for applications for the two property mandates is 7 August 2009, with the contracts expected to be awarded by 2 November 2009 on the basis of the lowest price.
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