The National Pension Reserve Fund of Ireland (NPRF) has redesigned its RFP documentation to encourage participation from boutiques and simplify the selection process.
The changes resulted from an NPRF survey of outperforming boutiques who had not responded to previous RFP requests. Smaller firms often lacked the resources to complete extensive documentation involved in public procurement processes. This gave larger managers with established marketing teams a significant advantage.
Eugene O'Callaghan, head of the investment manager programme at the NPRF, said: "Relatively, we had too many larger managers responding and wanted to encourage some of the hungrier, smaller boutiques who weren't coming onto our radar screen."
As a boutique's product was integral to the success of its business, he explained, its interests were more closely aligned with investors.
In addition, the shorter format simplified the selection process by sharpening the focus on managers' differentiating factors and unique investment insights. O'Callaghan explained: "We spent a lot of time redesigning the RFP to focus our questions on managers' differentiators, while also providing a level of comfort on their standard competences."
The rules were successfully introduced to appoint a manager for a €600m segregated emerging market portfolio, which is in its final stages.
"The process worked exceptionally well. We would highly recommend this approach to other pension funds," O'Callaghan said.
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