EUROPE - AP7, the government default option within the Swedish premium pension system, has awarded BNY Mellon a mandate to provide derivatives collateral services.

Financial details were not disclosed.

BNY Mellon will provide the service using DM Edge, its derivatives margin management platform, as well as its Triparty collateral management and Money Funds platforms.

Together, they will support AP7's equity over-the-counter derivatives trading, helping with "raising cash as collateral, reinvesting cash collateral and calculating margin call amounts".

BNY Mellon said it was the first time the platforms had been combined to tailor a collateral management service to a pension fund's needs.
 
Svante Linder, chief operating officer at AP7, said BNY Mellon had helped "solve the problem" of collateralising OTC derivatives using equities.

"The market is not favourable to using equities as collateral at the moment, and working with BNY Mellon on a combined solution has helped us to overcome operational and legal hurdles," he said.
 
In other news, a number of smaller Danish institutional investors are looking to award a €20m global long/short equities mandate, using IPE Quest.

Investment consultant Kirstein, which has tendered the mandate (QN1183) on behalf of the pension funds, said the fund's target would be to outperform the MSCI World index or similar indices "irrespective of the style in the market".

It said only single funds would be considered and that funds of funds would be of no interest.

It added that, while a global investment approach would be preferred, products with a regional focus - on Europe or the US, for example - would be accepted.

Kirstein said the Danish schemes sought an all-cap or large-cap fund, particularly those with a core style or orientation.

Fundamental managers with a "focus on both bottom up and top down" are preferred, as are funds with a long bias, while market-neutral managers or managers with variable biases will be accepted.

Funds need a minimum three-year track record. Interested parties should submit proposals no later than 24 June.

Any questions regarding this mandate should be director to Nikolaj Eriksen at Kirstein (nikolaj@kirsteinfinans.dk). To obtain information direct from IPE Quest, please contact Jayna Vishram on +44 (0) 20 7261 4630 or email jayna.vishram@ipe-quest.com.