US - State Street Global Advisors has held on to a US $4bn passive mandate following Chicago-based Illinois Teachers' Retirement System's (TRS) decision to put it out to tender.
The firm has been retained for two years because, according to Jon Bauman, executive director at TRS: “The System found their proposal to be most responsive to our RFI in terms of performance, fees, organisation, and competency in running large index funds.”
The decision is one of a raft of mandate changes made by the firm in the last few months following an asset allocation study in April 2002. These include the hiring of Grantham, Mayo, Van Otterloo & Co to manage a US$230m international equity emerging markets mandate and the hiring of Harris Associates and Artisan Managers to each handle an international equity return focused mandate of approximately US$215m.
Regarding private equity – an area the fund is looking to increase its exposure to – US$50m was allocated to Castle Harlan Partners IV for investment in buyout private equity, and up to US$50m to the OCM Opportunities Fund V for investment in distressed debt private equity.
Bauman added: “The majority of the manager changes are the result of manager structure studies arising from an asset allocation study.
“In addition, managers’ performance is reviewed on an ongoing basis. Several incumbent managers whose performance failed to meet our expectations or who had organisational issues arise were terminated.”
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.