UK - Staffordshire and Norfolk County Councils have initiated searches for equity and bond managers for their local government pension schemes (LGPS).

The £2.17bn (€2.66bn) Staffordshire pension scheme is seeking an investment manager to run one or more specialist portfolios in global equities, which will have a total asset size of around £600m.

The successful managers will be expected to run the assets through either pooled or segregated accounts, with a targeted minimum return of MSCI All-Country World index plus 2-4%, net of fees, with the contract expected to begin on 1 July 2009.

Staffordshire warned it will only consider active long-only managers with at least three years’ track record, so submissions based on fund of hedge funds, 130/30 or long-short funds will not be considered.

Staffordshire County Council tendered for a manager in August 2007 to run an active currency portfolio valued at between £500m and £1bn, although details from the pension fund’s annual accounts for 2007/08 showed no manager had been appointed by 31 March 2008. (See earlier IPE article: Staffordshire tenders currency)

However the report confirmed two portfolios run by Goldman Sachs Asset Management (GSAM) - a UK equity portfolio holding 13% of assets and a Tactical Asset Allocation (TAA) fund holding 4% - were terminated earlier this year, with the funds - totalling just over £400m - transferred into the Global Index Tracking portfolio run by State Street Global Advisers (SSGA).

Meanwhile, Norfolk County Council is searching for an active absolute return bond manager to run a mandate valued at around £300m, or 18% of the £1.84bn pension fund’s assets.

Under the terms of the contract, the successful manager will be expected to achieve an outperformance objective of up to 3% a year, net of fees, benchmarked against the three-month sterling London InterBank Offered Rate (LIBOR).

The pension fund recently awarded two active currency mandates to GSAM and Auriel Capital Management, to run a £100m specialist currency portfolio. (See earlier IPE article: Norfolk awards active currency mandates)

The deadline for submissions for the Staffordshire mandate is 3 December 2008, while for the Norfolk mandate the closing date is 26 November 2008.

Further details can be obtained from bfinance for the global equity mandate, and Hymans Robertson for the absolute return bond tender.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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