UK - The £1.2bn pension fund for East Riding of Yorkshire Council, one of the country's largest, has pelted Schroders from a £266m overseas equities mandate, only weeks after the beleaguered fund manager was dumped from a similar UK portfolio.
The local authority scheme axed Schroder’s from a £230m UK equities brief last month following a three year cycle of underperformance. This portfolio is now managed in-house where it will be kept if the team “continues to perform relative to other funds”, said the fund then.
But at the time the fund denied that Schroders were on the verge of losing this brief as well, adding only that that the review was part of “the normal course of events.”
The mandate up for tender is valued at £200m and covers Europe, Japan, and North America. Strategic investments will be at the discretion of the appointed party. The remaining £66m will also be handled in-house, bringing total assets managed by the fund’s six-strong investment team to just over £895m. But the fund hinted that the £230m UK equities portion may be outsourced, although “not at this stage”.
East Riding said that the new tender stemmed from another period of underperformance by Schroders, again lasting three years. But the firm will be invited to reapply.
Deadlines for applications is April 8. East Riding hopes to have the new arrangement in place by 1, October. The contract is expected to last for at least three years, with an optional extension for a further two.
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