UK - The board of the £1.4bn (€1.75bn) Pension Protection Fund is looking to hire an asset manager to look after one-third of its global bonds asset allocation.

The UK government set up the lifeboat fund under the Pensions Act 2004 to provide compensation to defined benefit pensions members in certain cases when schemes are insolvent or have insufficient funds to cover their benefits.

That fund is being managed in the same way as other defined benefit pension funds, so the board of trustees is looking to appoint a firm to manage approximately £230m, or one-third, of its global bonds allocation, according to a spokeswoman for the body.

More specifically, the four-year mandate is for an active bonds portfolio benchmarked to the JP Morgan Government Bond index and hedged to sterling.

At the same time, the PPF states "the underlying securities will need to be made available for use as collateral for the Pension Protection Fund LDI swap overlay.

The PPF currently has 50% of its assets allocated global bonds, while a further 20% is in UK bonds and cash, along with 12.5% allocated to UK equities, 7.5% allocated to global equities, 7.5% is in real estate and 2.5% is in currency.

Goldman Sachs Asset Management and State Street Global Advisors manage the remaining two-thirds of the global bonds allocation.

Submissions must be presented to the PPF by May 30.