IRELAND - The National Pensions Reserve Fund is to re-tender e6bn in passive equity mandates, managed between Barclays Global Investors (BGI), Bank of Ireland Asset Management (BIAM) and State Street Global Advisors (SSgA).
The passive mandates (all large cap equity) up for grabs comprise a Eurozone mandate managed by BGI worth e1.99bn; a e2.65bn Eurozone mandate run by BIAM/SSgA and a North America mandate also managed by BGI worth e1.37bn.
In April 2005, the NPRF shifted its e400m European equity mandate with BIAM to a passive mandate through the BIAM/SSgA alliance. The managers previously had control over a e1.7bn passive European equity mandate for the NPRF, benchmarked to the FTSE Eurobloc. Eugene O’Callaghan, head of investment manager programme emphasised the re-tender was “not due to any specific issues with the existing managers” but was designed to increase flexibility in the operational management of the fund.
Under the current mandates, each manager is appointed to track a particular market index. The re-tendered mandates will require managers to manage against one or more of a number of indices as specified.
The NPRF claimed this technique will allow a smoother transition between active and passive management, increase options in defining benchmarks for specialist active managers and assist in the overall aim of focussing risk on those strategies most likely to lead to additional return.
The NPRF also published its 2005 annual review today, where it disclosed an annual return of 19.6% (e2.4bn) bringing its total assets to e15.4bn, its stongest year since inception in 2001.
Paul Carty, chairman of the NPRF commission, said: “The strong performance reflected the benefits of the commission’s averaging in approach to the market under which we continued to invest in difficult market conditions of previous years.
“As a result the fund’s equity allocation was close to fully invested going in to 2005 and it was well positioned to benefit from strong equity markets, particularly in Europe.”
By Daniel Flatt
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