UK - Glasgow City Council has replaced incumbent managers Henderson New Star and Western Asset Managers as holders of the Strathclyde Pension Fund's bonds contracts, in favour of two new managers with absolute returns bond mandates.

A tender notice by the Scottish city council stated PIMCO has been awarded the mandate to manage £440m (€486m) while Threadneedle has taken on a mandate worth £220m.

The bond assets - which were initially tendered as being worth £1bn but were then cut back considerably to £660m - were previously managed by Henderson and Western. But a report submitted to the pension fund committee, ahead of its meeting on 9 September 2009, said the two asset managers were being replaced.

More specifically, the absolute return bond mandates will now require PIMCO and Threadneedle to deliver 1-3% per annum over the sterling 3-mth LIBOR cash benchmark.

The pension fund has a 15% allocation to bonds as part of its 18.5% fixed income and cash holdings, according its latest Statement of Investment Principles, dated 31 July 2009.

Officials at Strathclyde pension fund were today unavailable to give further insight in the pension fund's bonds strategy.