Simply knowing the market is not enough for Hewlett Packard's SwFr330m ($216m) Swiss pension scheme.

To qualify for a mandate, you need physical presence in the market.

The fund is split into four special-ised mandates; domestic equities and bonds and international equities and bonds. It only uses Swiss managers, which, stresses Michel Henneaux, benefits manager for Europe, is incidental, saying they were simply the best at the beauty parade".

Out of the asset allocation of 15% to international equities, only a small proportion is dedicated to the US - 3% of the total fund. Henneaux feels this does not warrant a beauty parade of US managers, until the fund ups the allocation.

"A specialised mandate in US eq-uities or bonds would almost certainly be given to a US manager. Unfortunately the size of our fund does not justify specialised mandates for US equities or bonds."

He is a great believer in stock pic-king, an element he feels a manager would be unable to effectively deliver unless it had a physical presence in the country of investment. As far as domestic asets are concerned, he says he would not be averse to considering a non-Swiss manager for local stock-picking, provided it had this presence on the ground. For the time being however, he is very happy with his current choice.

International stock-picking is an area, where Henneaux is fairly du-bious, though he has a Swiss manager currently in employ to look after that area. "We are fairly sceptical on the capability of a manager to do the right stock picking on a world-wide basis, be he based in Geneva, London or New York."

International bonds is another matter and an area where a US manager would be considered more ser-iously even without a local office. RO"