Mandate roundup: Bromley, Baillie Gifford, Fidelity, Lothian, UBS, Lazard, Martin Currie
UK – The London Borough of Bromley's £530m (€607m) local government pension scheme (LGPS) has launched a tender covering more than two-thirds of its portfolio.
The fund said it was looking to allocate £370m to as many as three long-only global equity mandates – more than doubling its current number of investment managers, if both Baillie Gifford and Fidelity Investments were to retain their positions.
It said the 15-year mandates would vary in size between £100m and £150m, significantly smaller than the portfolios overseen by its two current managers.
At the end of September last year, Baillie Gifford managed £274m of assets, while Fidelity was responsible for £235m.
While Baillie Gifford's performance for the three months to September was, at 4.3%, only 0.1 percentage point above Bromley's benchmark for the mandate, both managers outperformed their targets by more than 2 percentage points in the preceding 12 months and delivered similarly high above-benchmark returns over five years.
Bromley said it would consider both pooled or segregated funds that were actively managed.
The tender added: "The authority would prefer global equity strategies that aim to out perform market capitalisation weighted indices over market cycles in different prevailing economic conditions and in particular to provide protection in falling markets."
It stressed that strategies should be diversified according to region, sector and market capitalisation and that performance would be benchmarked against market cap-weighted indices such as the MSCI World or FTSE All World.
Contracts, once awarded, could run for as long as 15 years, with as many as four possible renewals after the initial three-year award ends.
Bromley hopes to attract a shortlist of up to a dozen managers and asks that interested parties apply through Allenbridge Epic's London office by 22 March.
In other news, the £3.7bn Lothian Pension Fund has appointed three managers to a global emerging market equity framework.
The framework, first tendered by the Edinburgh-based LGPS in May last year, sought managers that would oversee unconstrained long-only portfolios, outperforming the benchmark by 3% over a rolling five-year period.
Of the 14 shortlisted applicants, Lothian appointed Mondrian Investment Partners, Martin Currie Investment Management, Lazard Asset Management and UBS Global Asset Management.
In the initial tender, the fund said the 10-year framework agreement would cover a £200m emerging market allocation, currently overseen externally by Aberdeen Asset Management.
It was unclear at time of writing whether Aberdeen would lose part or all of its mandate, or whether any of the four managers would be appointed to oversee the mandate in future.