Wandsworth to change the benchmark
UK - Wandsworth Borough Council is seeking at least four new investment managers to run its pension fund portfolio. The move is an attempt to change the benchmark of the fund.
The £640m (€804m) local government pension scheme (LGPS) currently divides its assets between two balanced discretionary funds managed by UBS Global Asset Management and Aberdeen Asset Management.
However, a spokesman for the pension fund said that following the results of the scheme's triennial valuation on 31 March 2007 and the introduction of the new LGPS regulations on 1 April 2008 it believed it was to be "quite an opportune time" to introduce specific benchmarks.
As a result, the fund is searching for an active equities manager to run a portfolio estimated to be between £75-150m and it is planning to allocate £100-150m to an active global equity (ex UK) manager.
The remaining two tenders are for an active UK bonds portfolio valued at £100-150m and a passive multi-asset fund that will receive the largest investment of between £200-300m.
All the tenders are for an initial period of six years, with the option of extending the contract for a further six years, although the council confirmed that the contracts could be divided further if more than one suitable organisation is identified for the position.
However Wandsworth confirmed that the property element of the portfolio, valued at £42.1m at 31 March 2007, was not being retendered and would remain under the management of REEF and UBS.
The scheme highlighted that the tenders did not represent a change in the asset mix and instead said the scheme was "looking to go for managers that specialise in sectors or have a fund specific benchmark".
The scheme spokesman denied that the investment changes had been triggered by poor performance from its existing managers and said it would "welcome applications from the present incumbents".
Instead Wandsworth emphasised that the change was being driven by the need for a fund-specific benchmark, while the timing of the latest triennial valuation meant it "now knows where we stand", as the valuation revealed a funding level of 94%, up from 86% in 2004.
The closing date for applications to be considered for all four tenders is 22 August 2008.
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