Greenwich continues strategy shift with £100m emerging market mandate
London’s Greenwich local authority fund is tendering a £100m (€139m) emerging market (EM) equity mandate as it continues to implement its new strategic asset allocation.
The actively managed mandate, which accounts for the 10% target allocation to EM equity envisaged under Greenwich’s new investment strategy, would be awarded to a single manager.
Any manager would be expected to outperform the MSCI EM index by 2-4%, placing the funds invested into an existing pooled vehicle.
Asset managers should register their interest for the 10-year contract by 3 February.
The £1bn fund for the Royal Borough of Greenwich last year agreed a new strategic asset allocation with the aim of diversifying its investments.
|Greenwich strategic allocation|
|UK equities 5% cap weighted||15%|
|Global equity passive||15%|
|Emerging markets active||10%|
|UK Aggregate Bond Fund||10%|
Previously drawing its equity exposure from a UK equity and a general overseas exposure accounting for 45% of assets, the local government pension fund instead agreed to allocate 15% to UK equities and a further 35% to overseas equities.
The overseas exposure includes the 10% target allocation to emerging market equity but also a 15% passively managed global equity mandate and a 10% exposure to smart beta strategies.
The UK equity, passive global equity and smart beta allocations were tendered in November last year.
At the same time, the fund also tendered a £100m alternatives mandate, with which it was targeting exposure to a broad range of asset classes – compiling a non-exhaustive list of a dozen asset classes, including EM debt, hedge funds, commodities and insurance-linked securities.