UK - Somerset County Council pension fund is looking for a new active fixed interest manager to replace F&C Asset Management.

The fund, valued at just over £1bn (€1.3bn), currently invests around £208m in fixed interest, but is now tendering for a new active manager to run a mandate worth around £200m through a segregated mandate.

A spokesman for the scheme revealed it had decided to tender the contract following poor results from F&C, and although the tender is required to be open to all applicants Somerset admitted "knowing what their performance has been like it is unlikely they would be reappointed", as its results had been "bad enough that we feel the need to seek another manager".

Part of the Local Government Pension Scheme, the pension fund has around 38,000 members, from Somerset County Council and 50 other employers, and splits its investment between domestic and overseas fixed interest and equities, index-linked gilts, cash, domestic real estate and private equity.

The tender will close to applications on March 27 2008, then in April it is expected the fund will invite at least five managers to participate in the tender, with the mandate awarded to the most economically advantageous proposal.

Somerset last made a change to the allocation of its scheme in October 2006, when it awarded an unspecified currency hedging mandate to Record Currency Management.  (See earlier story: Somerset awards currency brief to Record)

Earlier this year F&C Asset Management confirmed it was in an offer period, after Friends Provident announced its intention to sell its 52% stake in the company, although no firm offers for the company have yet been revealed. (See earlier story: Friends Prov to sell F&C and Lombard)

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