UK- The e1,350m superannuation funds of the Welsh county councils Rhonnda, Cynon and Taff are stripping out up to £140m in fixed income from their balanced managers and looking for a fixed income specialist to invest it in global bonds.
The decision to separate the fixed income portfolio follows a strategy meeting earlier this year at which the committee decided to leave overall asset allocation unchanged but to introduce a tailor-made benchmark.
“Customising benchmarks seems to be the way ahead in getting better returns,” says investment manager Yvonne Keitch.
Deutsche AM and F&C Management run the fund’s assets on a balanced basis and will continue to oversee equity investments. Both have been invited to pitch for the new mandate.
Closing date for applications is 26th September and the fund will draw up a shortlist for beauty parades in November from which it will appoint one manager for a pooled and a segregated global fixed income brief. Contracts are expected to run from April 2003.
Asset allocation will remain unchanged and the fund will continue to invest 80% in equities. An in-house team will retain control of a small £17m property, cash and venture portfolio. Following the change, Deutsche will run 60% of the balanced mandate and F&C 40%.
The fund was advised by Ely Fund Managers, Ives Associates and Peter Clements, an independent advisor, and the WM Company which is helping construct the benchmark.