Sweden's third national pension fund, AP3, has put a $150m (£104m) US corporate bond mandate out to tender and according to a spokesperson for the fund, more active equity mandates are likely to be awarded later this year.
According to the fund, the US bond brief will be worth at least $150m, although the exact size of the mandate has yet to be determined. The mandate’s benchmark will be the Merrill Lynch Global Large Cap Corporate Index. Initially, the mandate will focus on US corporates, but AP3 say that it could later be extended to a global mandate.
AP3 say that the following requirements will have to be fulfilled by managers, if they wish to be considered for the mandate. The list of criteria includes: Skill and professionalism of the asset management team; Structure and transparency of investment process; Track record of past performance returns for the last five years; The asset management team should have a significant operation in the US; and that the supplier should be willing to establish an exchange of knowledge/experience with AP3's fixed income team.
Deadline for receipt of applications is May 28, 2001.
The fund’s strategy is to hire external managers in markets where these are expected to outperform AP3’s internal managers. Currently, Merrill Lynch runs AP3’s US equity brief, while State Street Global Advisors has the Japanese equity portfolios and parts of its European equity portfolio.
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