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Mandate roundup: Publica, Australian equities, IPE Quest

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Switzerland’s Publica is seeking an emerging market (EM) debt manager for a $100m (€89m) mandate, using IPE Quest.

According to search QN2076, the pension fund is looking to invest in hard currency EM debt, covering both sovereign and quasi-sovereign issuances with a maturity of up to 15 years.

The scheme, which reported assets of CHF37.7bn (€31.3bn) at the end of December, said it would benchmark performance against a customised JP Morgan EM bond index, without hedging returns into Swiss francs.

It added that it would prefer to maintain a low tracking error of up to 1%, with the manager allowed to include active elements that aim to match the performance of the selected benchmark.

However, performance should match the benchmark once all costs – including taxes, fees and transaction costs – are taken into account.

Publica said it hoped the EM debt mandate would diversify its portfolio further, and included the asset class after a recent asset liability management study.

To date, it has built up a 5% exposure to EM debt with its in-house team, deputy CIO Patrick Uelfeti recently told IPE.

The Quest search added: “Due to the limited risk-taking capabilities, a consequence of the demographic structure of the closed plans, the universe of eligible investments is limited to investment grade, and maturities are capped at 15 years.

“Added value should mainly come from country, bond selection and risk management by avoiding ‘red flags’ in credit.”

The fund said it would prefer its investment be held in a segregated accounted, with the chosen manager demonstrating a “strong” standing in EM debt and managing at least CHF2bn in EM debt mandates.

Additionally, only managers with a three-year track record will be considered, but a five-year record is preferred.

Interested managers have until 2 July to apply, stating gross-of-fees performance to 31 May.

In other news, an Australian institutional investor is looking to hire a manager to a AUD100m (€68.8m) equity mandate, using IPE Quest.

According to search QN2077, the Australian insurer said it would like to invest at least AUD100m in local equities.

The actively managed mandate would be benchmarked against the ASX 300’s performance, with a rolling three-year outperformance of 200 basis points, while observing a maximum tracking error of 4.5%.

The portfolio, managed as a segregated account, should hold at least 30 stocks, with no single holding accounting for more than 10% of assets.

The manager is also asked not to engage in securities lending or short-selling.

While a track record of five years would be preferred, the insurer did not set an minimum track record for the asset manager.

Nor did it set an minimum threshold for assets under management.

Managers have until 25 June to apply, stating gross-of-fees performance to 31 May.

The IPE news team is unable to answer any further questions about IPE Quest tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 7261 4630 or email jayna.vishram@ipe-quest.com.

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