Denmark’s LD Pensions has initiated a tender process for two Danish bond mandates, and is looking to appoint two or three asset managers for the mandates which include expected total assets of DKK11bn (€1.475bn).
The Frederiksberg-based pensions firm has launched one tender for Danish high-grade bonds and another for Danish short-term bonds, with the first being divided into two lots, and the second intended for a single asset manager.
Each of the mandates in the Danish high-grade bonds tender involve an expected total of DKK4.5bn of assets, and one of them includes European covered bonds as well.
LD said both mandates are for investment primarily in Danish mortgage bonds, but include the possibility of investing in government bonds from selected European countries.
Meanwhile, the Danish short-term bond mandate is for an expected DKK2bn of assets, which are to be invested in Danish mortgage bonds and Danish government bonds only, according to information from LD, including its tender notice on the EU’s TED tenders portal.
The objective for both mandates is to outperform the benchmark over a period of two to three years, it said.
For the short-term bonds mandate, outperformance should be 25-50 basis points per year, while managers of the high-grade bonds mandate should beat the benchmark by 50-100 basis points a year, without direct duration bets for either mandates, LD said.
The firm, which is currently equipping itself to invest assets in Denmark’s new holiday allowances fund, said applicants may submit a tender for one or both of the high-grade bond mandates, but that the two mandates would be awarded to different tenderers, meaning no manager could be awarded both.
The deadline for the receipt of tenders or requests to participate for both tenders is 2 June at 4pm CET.
LD pensions has released a string of tenders so far this year — including a €100m high-conviction emerging markets equities mandate at the beginning of this month and a €400m high conviction developed markets equity mandate in mid-March.
Its search for external managers has been stepped up mainly in preparation for asset inflows to the holiday allowances fund, though it remains uncertain exactly how high these will be.