Austrian pension hunts emerging markets manager for €30m mandate

An Austrian pension fund is has launched a search for an ESG-tilted emerging market equities manager via IPE Quest.

According to search QN-2503, the investor is seeking to allocate €30m to an active mandate, although it has yet to decide what style.

The fund must be compliant with Austria’s BMSVG law governing severance payment funds. This law restricts the use of derivatives to hedging purposes only, and requires all investments to be listed on exchanges within an OECD country. In addition, all holdings must be disclosed to the investor “on a daily basis with limited delay”.

The investor said: “Since the legal requirement of OECD listings of the fund holdings is a [particularly] difficult task for investments in emerging market equities, the manager should show that he has experience in handling such a portfolio and knows how to invest in this limited stock universe without compromising his performance and creating substantial systematic biases relative to the broad EM universe or his own plain vanilla EM funds. The same applies to the ESG approach.”

Regarding ESG requirements, managers “should be committed to responsible investing and the fund itself should have an integrated ESG approach in the investment process”, the tender document stated.

This included implementing an exclusion list set out by the Austrian Ecolabel organisation.

The pension fund said it was willing to seed a new fund if appropriate. It is open to segregated mandates but would prefer a pooled fund offering.

Although no specific benchmark has been set, managers pitching for the mandate should “suggest a benchmark that would fit the fund”, the investor said.

Managers should state performance net of fees to 31 December 2018. The minimum track record required is five years. If offering a new product, managers should demonstrate performance “through the performance of a comparable product”.

Companies bidding should have at least €500m in the strategy already, and at least €5bn under management across all strategies.

Responses to the tender should be submitted by 31 January at 5pm UK time.

The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email jayna.vishram@ipe-quest.com.