UK roundup: PPF, NILGOSC, Tesco, Finance Bill 2010
UK - The Pension Protection Fund (PPF) is seeking a number of alternative credit managers to take part in a framework agreement for the fund, while the Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) is tendering for an investment adviser.
Elsewhere, Tesco is continuing the sale and leaseback of its property portfolio in partnership with its pension trustees, while the government has published the Finance Bill following the emergency Budget last month, including changes to the age 75 rule and pension tax relief.
It said potential strategies could include distressed debt, mezzanine financing, bank loans and other approaches to "optimise, primarily, non investment grade corporate debt".
Potential candidates are expected to state the strategy type they wish to tender for, although they can apply for more than one strategy.
A panel of up to 10 managers will then elected by the board of the PPF for the potential placement of funds.
However, it noted that some fund managers "may not have suitable vehicles available for immediate investment", but may have within the four-year framework period.
The closing date for submissions is 27 July.
Further information is available from the PPF procurement department.The NILGOSC is seeking an investment adviser to provide investment services to the local government pension scheme.
The fund, valued at £2.5bn (€3bn) at the end of March 2009, currently employs Hewitt as its investment adviser, but it is now re-tendering the five-year contract.
As of March 2009, the fund had an asset allocation of 35.2% in equities, 47.8% in managed or unitised funds, 6% in property, 5.4% in index-linked securities, 3.8% in fixed interest securities and the remainder of the fund in other assets.
The closing date for tender submissions is 13 August, with further information available from the pension fund.
It has sold 41 stores for a total consideration of more than £950m, with an average net initial yield of 4.9%.
The transaction is primarily financed by fixed rate notes issued by Tesco Property Finance 3, and is structured as a 50-50 joint venture with the Tesco pension scheme trustees.
This is the second venture completed with its own pension scheme, but the supermarket has also completed three property deals with other UK pension funds, such as BP, over the last two years. (See earlier IPE articles: Tesco continues property deals with pension funds and Tesco fund gets £500m property as deficit exceeds £1bn)
Tesco noted the proceeds would not be going toward the pension fund, but instead be used to fund new property development projects in the UK and international markets.
Changes in the bill include the repeal of the decision to limit pension tax relief to the basic rate for high earners, and modification to pension tax rules allowing pensioners aged 75 (on or after the budget date) to defer a decision on pension payments until new rules are finalised by the government next year.