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NPRF awards €600m emerging market mandate

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  • NPRF awards €600m emerging market mandate

IRELAND - The National Treasury Management Agency (NTMA) has appointed three managers to run emerging market mandates for the National Pension Reserve Fund (NPRF).

The NTMA, which manages the Irish pension fund, began the search for one or more managers in November 2007 in an effort to increase its exposure to emerging markets through long only active equity products. (See earlier IPE article: Irish bodies increase mandate needs)

Following this tender process, the NTMA has split the €600m contract among three firms, Principal Global Investors (Europe); US-based firm Batterymarch Financial Management and Pioneer Investment Management.

An electronic auction was used for the tender process, and the three successful firms beat competition from 69 other providers on a range of criteria including investment and operational processes, investment strategy, historical performance and the quality of people.

The NPRF currently has a target asset allocation strategy, until the end of 2009, of 66% in equities - of which 5% is currently targeted to emerging markets, 5% in small caps and the rest in large caps - while private equity and infrastructure is allocated 10% of assets, 8% of the fund is in property, 2% is in commodities and 1% is in currency, leaving the remaining 13% of assets invested in bonds.

However, the latest figures from the pension fund showed the scheme had 67.4% allocated to quoted equities at the end of June 2008, of which only 1.9%, or €361m, was in emerging markets, and 3.9% was in small caps.

In addition, the NPRF interim report showed the fund saw a negative return of -12% in the first half of 2008, while net assets fell from €21.2bn to €19.5bn over the six months despite a decrease in the quoted equity holding of 71.4% to 67.4%. (See earlier IPE article: NPRF saw negative return of -12% in H1)

Meanwhile, following its successful tender for the NPRF emerging markets mandate, Pioneer Investments has announced the "full launch" of its institutional business in Ireland as part of its growth strategy.

The company already manages around €120bn assets in its Dublin investment centre, and over €190bn assets globally, but it has now appointed Dave Santry, from Bank of Ireland Asset Management, as the new head of institutional business development in Ireland.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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