UK - The £1.5bn Staffordshire County Council Pension Fund is looking to appoint a fund manager to run a tactical asset allocation mandate valued at £815m.
The winning manager will work with the scheme’s equities portfolio on an overlay basis using equity and bond market futures and currency exchange strategies.
The council is offering a three-year contract with the option of extending this for a further period.
The deadline for expressions of interest is January 10, 2003.
In April, Staffordshire principal accountant Reg Smith said the scheme had concerns over fees charged by its specialist managers and their returns, which prompted it to undertake a full review of its investment managers.
NAPF data shows the scheme’s current equity managers are Baring Asset Management, Deutsche Asset Management, Jupiter Asset Management, Putnam and Invesco Asset Management.
Consultants say the growing use of specialist managers is making tactical asset allocation mandates more popular.
Aon senior investment consultant and actuary, Tommy Garvey, said that such mandates made dealing in assets cheaper.
Mercer Investment Consulting global head of research, Bill Muysken, said tactical asset managers were typically given a proportion of the fund’s equities, usually around 3%, to use in futures trading.
Such trading, he said, could be used to adjust the asset mix in a fund’s portfolio, often to balance the risk of currency falls between equities in differing countries.
He added that while these overlay activities were aimed at managing risk and adding value, there was also the possibility that they could lose value for the fund.
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