UK - The £800m (€1.2bn) Flintshire County Council Clwyd Pension Fund has tendered a total of £145m in unconstrained fixed income and equities.

The fund in North Wales also seeking managers for £120m in UK equities.

The tenders are part of a wide-ranging review that should be in place by April next year.

"In some instances they are new mandates," said Olivier Cassin of consultancy firm bfinance, which is advising the council in this tender. The UK core equity portfolio was already under management, though it has come under a periodical review, according to Cassin.

The council did not want to disclose which firm manages the assets of this brief.

"As a result of previous reviews, the fund already had a diversified portfolio and upper quartile performance compared with its peers over three and five years, hence no fundamental structural adjustments have been made on this occasion," a spokesman for the fund said.

Flintshire is the latest UK local authority to go "unconstrained" - that is, seeking investment managers to run assets not benchmarked to an index.

The global unconstrained equities portfolio demands "high alpha, absolute return, special situations or a hybrid," but "no multi-managers" the council said.

With global unconstrained fixed income portfolio, fund managers will be allowed to invest the global fixed income assets in high yield, overseas bonds, emerging market debt, mortgage-backed securities, unrated bonds, derivatives and currencies. The shorting of bonds is permitted.

"There will be some changes in the method of delivery aimed at further diversification from, and less constraint on, traditional asset classes, along with the use of new investment approaches, tools and products to improve returns further and reduce volatility," the spokesman added.

The mandate covering the UK equities calls for a return of 1.5%-2.5% outperformance gross of fees on a three-year rolling basis.

According to the council there is no minimum or maximum duration: "The contract entails the management of equity and fixed income portfolios with a long term target," adding that "it might be reviewed and/or terminated at any time by the contracting authority depending on the quality of service and the performance delivered."

Clwyd Pension Fund, with almost 13,000 members, said that the tender will go to "the most economically advantageous tender". The deadline for receipt of tenders or requests to participate is October 2.

In the next few months the fund will advertise more tenders covering UK core equity, UK equity High Alpha, global equity unconstrained, global tactical allocation funds and commodities, due to its "modified approach and capacity constraints".

"The aim is to have the mandates in place by April 1, 2007," according to the spokesman.

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