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Mandate roundup: Cornwall, JLT, NEST, LCP, Michelin Pension and Life Assurance

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  • Mandate roundup: Cornwall, JLT, NEST, LCP, Michelin Pension and Life Assurance

UK - The Cornwall pension fund is looking to hedge its inflation risk, with the fund tendering for an investment managers to manage its £1.3bn (€1.6bn) of liabilities, all of which are linked to consumer prices index.

The  £1.1bn local authority scheme is inviting tenders for liability management  using bonds and other appropriate vehicles, according to the mandate.

The fund said: "Changes to the rate of inflation represent a major risk to the fund which the fund is now seeking to be managed under the mandate to be awarded."

The scheme intends to make £50m available initially for protection or hedging strategies, though the allocation is expected to rise to 20% of assets over time, it said.

"The fund wants to achieve the highest level of protection possible and is seeking proposals of how this can be achieved within the Local Government Pension Scheme investment regulations 2009," it said.

Suggestions were also welcomed on the timing and introduction of the protection, as well as its ongoing management and how performance could be measured, the fund said.

The deadline for receipt of tenders is 17 September, with additional information available from JLT Investment Consulting's Manchester office.

Meanwhile, the National Employment Savings Trust (NEST) is seeking to appoint several new investment advisers, this week releasing tendering a framework agreement that could run for four years.

The UK auto-enrolment fund is calling for suppliers to tender for two separate lots, with the first for general investment advice, and expected to be awarded to one supplier.

The second is a framework agreement for investment advice during the search and selection of collective investment schemes, including unit linked life funds. This lot is to be awarded to at least three suppliers.

Suppliers are being encouraged to bid for both lots if appropriate. One firm could be selected for lot one as well as becoming a supplier for the second lot, NEST said.

The second lot would see the appointed advisers assisting the scheme with as many as 10 searches over the next three years, with a 12 month extension on the contract possible.

However, it noted successfully entering the framework agreement did not guarantee the adviser would assist on any searches.

A spokesman for NEST said the first lot became necessary after existing contracts with the investment adviser came to an end, while the second lot, to assist with the selection of future collective investment schemes,  was done in anticipation of the scheme's requirements.

Tenders must be received by 28 August.

Separately, Michelin Pension and Life Assurance's UK pension plan has chosen   consultancy LCP to provide investment advice.

Chris Wood, chairman of the trustee of the £1.4bn defined benefit fund said it was impressed by the LCP team's clear view on investment issues and their record of seeking out innovative solutions. 

Ken Willis, investment partner at LCP, added: "As pension schemes continue to face complex challenges from a number of fronts, our investment advice aims to keep things simple and focus on what really makes a difference for our clients."

The firm would work closely with the trustee of the UK pension plan to give strategic investment advice that moved them towards their long-term funding aims, he said.

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