UK - Northumberland County Council has initiated a search for an investment adviser to its £640m (€815m) local government pension scheme.

The pension fund currently employs Watson Wyatt as its adviser following a reappointment in 2000, however minutes from a recent meeting of the pension fund panel showed the original appointment of Watson Wyatt dates back more than 10 years before this.

Northumberland has now issued a tender notice for an investment adviser to provide information, advice and technical support to officers and members of the pension fund, in compliance with LGPS investment regulations, from March 2009.

The contract will have an initial period of four years although the mandate is designed to operate on a rolling basis for the purposes of renewal.

Details from the pension fund's business plan for 2008 revealed the appointment of Watson Wyatt is open-ended but "it has been a long-standing item in the Business Plan to formally review the appointment".

The issue was last raised at a pension fund panel meeting in November 2007, however the timing of the local government elections in May 2008 led to the panel agreeing to defer the review until after the elections to allow any new panel members to benefit from continuity. (See earlier IPE article: Northumberland delays ALM and adviser reviews)

The pension fund has also issued a statement confirming it has £7.3m invested in the Lehman Crossroads Fund XVIII, a private equity investment, and that it is a limited partner in the arrangement.

However it stressed: "The funds allocated to this investment are a separate legal entity from Lehman Brother Holdings Inc and as such they are not part of the bankruptcy filing. These funds are therefore safe."

It added: "The County Council will continue to monitor the situation both in respect of Lehman Brothers and the other invested assets of the Northumberland Pension Fund, given the unprecedented pace of change within the world's financial markets."

The closing date for applications for the role of investment adviser is 17 November 2008, and any queries should be directed to Northumberland County Council.
 
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