Mandate roundup: FRR, Merseyside, Lancashire, Cumbria
EUROPE - France's Fonds de réserve pour les retraites (FRR) is tendering two investment mandates that will see the €33bn reserve fund increase its exposure to both French OATs and other investment-grade sovereign bonds.
The mandates, part of a restructuring being undertaken by the FRR to comply with France's recent pension reform, will "ensure coherence" in the fund's portfolio, it said in a statement.
As part of the reform, FRR will contribute €2.1bn per annum to the Caisse d'Amortissement de la Dette Sociale (CADES), the country's heavily underfunded social security fund, between now and 2024.
The two mandates aim to invest in French OATs, employing a buy-and-hold approach, while other countries bonds will also be considered as long as they are investment grade.
The scheme recently announced that its executive director Antoine de Salins would soon leave to become chief investment officer at Groupama Asset Management.
In other news, Merseyside Pension Fund is tendering two six-year contracts for an investment consultant, as well as an actuary.
The actuarial tender, a joint search conducted with Lancashire County Pension Fund and the local government pension scheme (LGPS) for Cumbria, will see the successful bidder advise schemes with a combined value of more than £10bn, with Merseyside accounting for close to half of all assets.
Successful applicants will be expected to conduct two triennial valuations, as well as interim valuations where required and advise on issues of governance and risk management.
It is not the first time several LGPS have issued a joint tender, with the Environment Agency last year launching a search for actuarial and investment management services with five other regional funds.
The second tender sees Merseyside looking to appoint an investment consultant to advise on issues of asset allocation and benchmarking, and report on issues in the market that may impact the scheme.
The pension fund also notes that any company appointed to the role will be unable to compete for investment manager search contracts, as it wishes to observe best practice and keep the two roles separate.
The LGPS, which saw strong returns of 32% for the financial year to March 2010, according to its most recent annual report, employed Mercer as an actuarial consultant, with C B Richard Ellis employed as real estate portfolio manager.
Both contracts will run for an initial period of three years, with options to renew for a further three years upon satisfactory completion.