EUROPE – The €14bn French pension fund for civil servants (ERAFP) has launched a call for tenders to select three managers of small cap equities in France and three managers of mid- and large cap equities in the US.
The fund has decided to pursue its asset allocation diversification programme by investing in US equity funds. According to ERAFP, the amounts to be invested within a three-year period could total around €300m.
ERAFP said it was seeking conviction-based management with no tracking error limit for these mandates. Although the portfolio would be invested mainly in mid and large cap US equities, its investment objective was to outperform the main US indices.
“Management must be based on an in-depth fundamental analysis of each portfolio line and dialogue with the target companies. With this in mind, priority will be given to local firms.” ERAFP said in a statement.
As well as investment in mid and large cap equities within the United States, ERAFP also launched a restricted call for the allocation of three small cap equity portfolio management mandates in France.
The leading French public pensions fund also decided to increase the weight of small cap equities in its asset allocation by investing in French small cap equity funds. The amounts would be invested within a three-year period and could total around €150 million.
“ERAFP is seeking conviction-based management with no tracking error limit for these mandates. The portfolio will be invested mainly in small cap French equities with a long-term investment horizon and an objective of outperforming the CAC Small index,” it said in a statement.
The portfolio could have limited exposure to micro and mid cap equities and its composition must comply with ERAFP’s socially responsible investment (SRI) guidelines.
The investment company is required to analyse each portfolio line taking into consideration ERAFP’s SRI guidelines, either in-house or using outside providers.
The length of the initial contract is five years; ERAFP may extend this contract for three successive one-year periods.
In other news, Somerset County Council Pension Fund in the UK is looking for an investment manager to run an Asia Pacific equities portfolio.
According to the tender notice, the mandate is for an active long-only developed Asia Pacific ex-Japan equity manager, to manage approximately £40m (€47m) through a segregated mandate.
The fund said the contract would not be divided up, and variants would be accepted. The deadline for receipt of applications is noon on 7 June.
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