UK- The London Borough of Brent pension fund is seeking a specialist currency manager for active alpha generation.
The £380m (e558m) pension fund is planning to commit an initial £5m to a currency mandate, pursuant to the recommendation of the selected manager, said Martin Spriggs, head of exchequer and investment for the pension fund. The £5m would represent a buffer amount of around 3% of the fund’s £150m investment in overseas equities, he said.
“We’ve been looking for a way in to making some active gains in currency for a couple of years, but initially couldn’t find a route into it,” Spriggs said. “But in going to various seminars and reading articles on the subject, we learnt that various managers do have skills in this area. We’re seeking to ensure that we diversify our assets and diversify our sources of return, to make returns not just from equities and bonds.”
The Brent Pension fund’s asset allocation is broken down roughly into 36% overseas equity, 24% bonds, 3% property, 5% hedge funds, UK small cap equities 2%, less than 1% in private equity, with the balance in a UK FTSE350 tracker fund, Spriggs said.
“Since we have some money in private equity, some in hedge funds and some in property, currency was really the next cherry on the tree,” Spriggs noted.
Tenders must be received by 13 June, and the contract is set to begin in October. Mercer Investment Consulting is assisting the fund in its search.
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