UK - The £980m Environment Agency active pension fund is tendering for investment managers to look after two global equity portfolios together worth £130m.
The tender is part of an overall move from a balanced to specialist manager structure, being phased in over 2004 and 2005 following a review of the fund’s investment and manager strategy.
According to the tender notice, the fund is seeking managers with “differing investment styles” to look after the mandates, valued at about £65m each.
The fund’s existing managers are Legal & General, Henderson Global Investors, Merrill Lynch and State Street Global Advisors.
“The appointed managers must demonstrate corporate research engagement and governance capability (this must include environmental issues) and/or the ability to work with third parties on corporate research, engagement and governance,” the Environment Agency said in its tender notice.
“There will be a performance target of exceeding the benchmark return by between 2 and 3% per annum on a rolling three year basis.”
Asset allocation of the fund stands at: UK equities 49.8%, overseas equities 20.2%, bonds 24.5% and cash 5.5%
The proposed future benchmark asset allocation of the fund will be: UK equities 31.5%, overseas equities 31.5%, index-linked gilts 13.5%, non-government sterling bonds 13.5%, property 5% and private equity 5%.
The fund plans to divide the remaining mandates between a multi-asset passive manager (£380m), active UK equity specialist manager (£160m), active bond specialist manager (£130m), active equity manager, specialist environmental (£130m), active equity manager, specialist environmental, (£70m), property manager (£50m) and private equity manager (£50m).
Deadline for tender is October 4.
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