UK – The roughly £499m (€730m) Oxfordshire County Council Pension Fund is tendering a £20m investment management mandate to manage specialist private equity fund of funds.
According to the contract notice, the investment manager will manage “one or several” fund of funds administered by the Council.
“The assets to be managed are valued at approximately £20m with an option to extend the investment to an additional £30m in the future,” said the notice.
It added that assets would be managed by one or several managers in global or regional fund of funds.
“Specific sector fund of funds might also be selected depending on the quality of the submissions. Fund of funds currently closed will be considered,” said the notice.
It is unclear whether this is a new mandate or whether the current managers will be replaced, as the fund could not be reached for comment.
Consulting firm bfinance is assisting in the tendering and selection process.
The mandate in this open tender procedure will be awarded based on “the most economically advantageous tender” in terms of quality, technical merit and price. The closing date is March 23.
Meanwhile, Hymans Robertson has expressed “robust” views on the future of private equity following concerns that the asset class may disappoint.
Senior investment consultant and private equity research head Geoff Singleton said the firm encourages clients to invest through the funds of funds route, whereby clients benefit from appropriate manager diversification and the skill of the fund of funds manager in selecting private partnerships.
“This will achieve above average returns and gives better access to successful funds than an individual investor could achieve.”
According to the Singleton, fund of funds are polarising into two groups: ‘core funds’, where future returns are lower but above public markets; and ‘specialist funds’ which focus on niche segments of the market.
As a result, Singleton argues that the appointment of a single fund of funds manager, who offers a series of ‘core funds’ could be sub-optimal.
“Trustees should consider allocating assets to the specialist managers as opportunities arise. However the biggest impediment to this is the governance structure of most trustee bodies which can make decisions of this type difficult at best.”