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Mandate roundup: UK pension pool confirms £1bn smart beta allocation

Brunel Pension Partnership, one of eight asset pools formed by UK local authority pension funds, is investing almost £1bn (€1.1bn) in a multi-factor equity fund run by Legal & General Investment Management (LGIM).

The £30bn asset pool appointed LGIM as its passive equity fund manager in April and has been transitioning assets since then.

Mark Mansley, chief investment officer at Brunel Pension Partnership, said it considered the LGIM Diversified Multi-Factor Equity fund to have “several distinct advantages, including relatively simple construction, purity of approach and excellent track record”.

“These are combined in a sensible way which avoids many of the issues of some multi-factor approaches,” he added.

LGIM developed the product with smart beta index provider ERI Scientific-Beta. 

Mark Mansley, chief investment officer, Brunel

Mark Mansley, chief investment officer, Brunel Pension Partnership

Launched in July last year, the multi-factor equity fund is a commingled life fund for UK institutional clients and allocates between Scientific Beta indices according to regional weights determined by LGIM.

Noël Amenc, CEO at ERI Scientific Beta, said Brunel’s investment in the fund was “a major vote of confidence in our approach”.

Family office seeks securitised credit investments

A family office based in Germany is carrying out a preliminary search for securitised credit managers via IPE Quest’s Discovery service.

According to DS-2487, any potential mandate would be for $5m (€4.4bn), to be invested via an open-ended UCITS vehicle.

The family office is interested in a global, liquid strategy. It said the portfolio should tend to be “in the high grade” spectrum but it would not rule out other securities, such as regulatory capital or mezzanine. However, it should not be a pure mezzanine fund. There should be no investment in loans.

The investor has indicated a return target of 3-5%, but said this was not a hard constraint.

The deadline to respond to this pre-RFP search is 22 November.

Danish foundation on the hunt for global EM manager

The Danish National Research Foundation is looking for a global emerging markets equity manager to run a €30m mandate.

The Dkr6bn (€804m) foundation said it would consider managers’ long-term ability to deliver future risk-adjusted excess returns, and the strength of their reference clients and key staff.

Candidates must also be able to demonstrate that they take environmental, social and corporate governance (ESG) issues into account.

The mandate will be benchmarked against the MSCI Emerging Markets index. The foundation said it would not accept regional or country specific strategies, and the procurement also did not cover strategies whose main focus was on emerging market small caps or frontier markets.

The foundation wants to invest via a UCITS fund. The deadline to apply is 29 November.

German state awards ESG engagement mandate

The German federal state of Lower Saxony has awarded an engagement services sustainability overlay mandate to Hermes EOS.

The mandate relates to around €2bn of assets held by the state, its pension fund and special remediation funds.  It covers corporate bonds, convertibles and equities – government bonds are excluded.

The overarching focus of the mandate is on the implementation of an active approach to calling on companies to respect ESG criteria. The state said it was not interested in investment approaches that excluded or selected companies based on ESG criteria.

Four providers applied to run the mandate, according to a tender notice.

The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation 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 3465 9330 or email jayna.vishram@ipe-quest.com .

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    Asset class: Mid & Small Cap Equities.
    Asset region: Global.
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