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Greenwich continues strategy shift with £100m emerging market mandate

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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.

Strategic allocation as of March 2015
Greenwich strategic allocation 
Asset ClassTarget
UK equities 5% cap weighted15%
Overseas Equities35%
 Global equity passive15%
 Smart beta10%
 Emerging markets active10%
 Multi-asset credit10%
 UK Aggregate Bond Fund10%
Multi-asset strategy10%
Diversified alternatives10%

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.

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