GLOBAL - The $36.6bn (€27.7bn) United Nations Joint Staff Pension Fund (UNJSPF) has decided to outsource its $9bn US equities portfolio.

With the change in management the portfolio will also be shifted from active to passive as it had consistently underperformed the benchmark over the last years.

"The active management had exceeded the benchmark in only five out of the past 20 years", UN controller, Warren Sach told a press conference. He confirmed that currently 13 managers are being shortlisted for the mandates.

Last year, various UN bodies involved in auditing, controlling and running the pension fund had discussed whether or not to outsource management of the portfolio. While there was a wide consensus on moving from active to passive management, the advisory committee wanted to keep the investment inhouse to save money.

Regarding allegations of favouritism in procurement at UNJSPF, its chief executive, Bernard Cochemé told reporters that the UN's internal oversight offices had conducted a probe. It found that not all rules had been followed in awarding a five-year contract for operational reorganization to Sprig Ltd in 2001.

However, it was also established that none of the UNJSPF managers concerned held any financial interest in Sprig or had colluded with the company. Subsequently the initial contract was renewed.

Cochemé said that now a Procurement Advisory Committee was set up to oversee awards of contracts in the future.

Over the last year the fund's assets grew from $31.5bn to $36.6bn.