UK – Two UK local authority pension funds – London Borough of Enfield and the Lothian Pension Fund - have separately opted to run significant assets in an unconstrained manner.

They follow other funds such as City of Westminster and Kent County Council in allowing asset managers to run assets that are not benchmarked to an index.

The City of Edinburgh Council has tendered for a fund manager to run £260m in specialist global equities for the Lothian fund.

“The portfolio is to be managed on an unconstrained basis,” it said. “The performance target is 3% to 5% per annum above the FTSE All World Index.” A maximum six-year contract would be awarded.

It will invite between five and 15 operators to tender, with the award going to the “most economically advantageous tender” in terms of a nine-point criteria list.

The deadline for the receipt of tenders or requests to participate is July 19.

And Enfield, assisted by Hewitt Associates, is looking to appoint “one or more active unconstrained global equity managers to manage 25% of the total fund which represents approximately £125m”.

“The borough are seeking to appoint one or more complimentary global active equity managers to manage a combined total of approximately 25% of the assets and targeting at least FTSE World +3% (net of fees) or unconstrained mandates with an absolute return target,” the tender states. It is also seeking “the most economically advantageous tender”.

In July last year Hewitt disclosed that 39 of its UK pension fund clients had gone unconstrained mandates, up from 20 six months before.