UK mandates update: Leicestershire seeks active managers
UK - Leicestershire County Council is looking to hire three investment managers for its £1.9bn (€2.1bn) local government pension scheme (LGPS).
The council is seeking investment managers for an active global credit mandate, valued at between £100-200m, which is to be hedged into sterling, alongside a tender for one or more active global equity managers to run a portfolio valued at between £150-300m.
Leicestershire noted that while the benchmark for the equity mandate has not yet been finalised, the successful manager or managers is likely to be set an outperformance target of between 1-4% per year.
The council is also seeking one or more managers to take on a specialist global emerging markets equity mandate, valued at up to £100m, from 1 April 2010. The mandate has an outperformance target of 2-5 % over the MSCI Emerging Markets Index over a rolling 3-year period, although Leicestershire expressed a preference for pooled investment vehicles.
The council has also issued a tender notice inviting potential investment managers to "express an interest" in providing ongoing "bespoke asset allocation advice delivered in conjunction with a Tactical Asset Allocation (TAA) programme".
The council stated the remit of the appointed manager would be to "operate a customised TAA strategy, within agreed parameters and with an agreed risk budget". It would also have the aim of adding value in the medium term, although the council confirmed it would consider all strategy styles, such as quantitative, fundamental and thematic.
It added that while more than one manager may be appointed to the role, the successful appointee(s) will also be required to inform the pension fund management board of issues associated with the investment of the fund across the main asset classes, taking into consideration liabilities, funding position and risks of the fund.
The closing date for the TAA, global credit and global equity tenders is 16 November 2009, with further information available from Hymans Robertson. The emerging markets manager search is organised by bfinance and ends on 30 November 2009.
Meanwhile, the recent completion of Buckinghamshire Council's investment manager appointments for bonds, global equity and alternatives, has led to the adoption of a revised strategic asset allocation for the £1.2bn pension fund.
Details from the investment strategy update, presented at the last meeting of the council's Pension Fund Consultative Group earlier this month, claimed the increase in the number of investment managers has "built into the new portfolio greater flexibility to enable the fund to pre-empt and react to market conditions and manager performance more dynamically than previously and we will appoint a transition manager to assist us as far as is possible".
The appointment of three new global equity managers means the previous mandates run by Alliance Bernstein - less constrained global equities - and Capital International - global equities - have been reduced from 6% and 9% of the fund respectively to zero. (See earlier IPE article: UK mandate round-up: Bucks appoints global eq managers)
In their place, Schroders will run a 7% global equity value mandate, Deutsche Bank is in charge of a 7% global equity neutral portfolio- and Investec has been awarded the 7% global equity growth portfolio.
And the core plus bond mandate awarded to Royal London Asset Management (RLAM) accounts for 10% of the fund's assets, alongside a 28% portfolio of passive global equities and bonds run by Legal & General. Elsewhere, the UK equity mandate run by Mirabaud has been reduced from 10% to 8%, and private equity and property allocations have increased to 8% and 10% respectively.
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