Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
September 29, 2003 01:00 AM

Suppose there was an RFP, but no mandate?

Beatrix Payne
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    LIVERPOOL, England —The Universities Superannuation Scheme soon will choose a winner in its competition for a long-term, socially responsible manager, but some large international managers already are underwhelmed by the prize.

    Results in October

    The £20 billion USS, Liverpool, next month will announce the results of the competition seeking proposals to run a hypothetical €30 billion ($34.5 billion) mandate. The RFP is unusual not only because it is hypothetical, but also because it asks money managers to design a long-term portfolio that is managed in a socially responsible way.

    A few large international money managers said they were teased by the RFP and are now disappointed to learn there is no actual pool of money to be won. Others said they declined to participate once they realized there would be no real mandate.

    The competition was backed by well-known international pension plans including Ontario Teacher's Pension Plan, Toronto; PGGM, Zeist, Netherlands; and the New York City Employees Retirement System, New York; as well as consultant Hewitt Bacon & Woodrow, London.

    The RFP always was intended as a hypothetical exercise designed to encourage trustees, plan sponsors, investment managers and consultants to come to grips with managing long-term investment mandates in a sustainable way, says Raj Thamotheram, senior adviser on sustainable investment to USS and one of the key people driving the project.

    Questionable ambiguity

    He maintains it was always made clear that there was no actual money involved and said no consortium exists to give mandates to managers. "But we hope (this competition) will influence mainstream mandates,' he added.

    At first glance the RFP, issued in March, certainly leaves room for ambiguity.

    The RFP starts:

    "In response to the on-going bear market, an international consortium of major pension funds has decided to create a fresh mandate worth up to €30 billion. This mandate, which has been created by each of the funds allocating less than 5% of their individual assets, will be awarded to teams who can convince the consortium that they will operate in a genuinely long-term and genuinely responsible manner."

    But flip through to the final paragraph and the real prizes are revealed:

    Plaque for 1st

    "The winning corporate entry will receive a plaque from Universities Superannuation Scheme Ltd. and Hewitt, Bacon & Woodrow, London. The winning individual/non-corporate entry will receive a prize of €15,000 from STW Fixed Income Management."

    Not much of a substitute for a €30 billion mandate.

    Marketers at a number of U.K.-based money managers said the fact that there was no money to manage meant they did not participate. They agreed the USS had its heart in the right place but said the cold demands of commerce prevented them from giving time to what was a largely theoretical exercise.

    "We didn't participate because we wanted to talk to our clients directly about these issues. We are extremely interested in the outcome of the competition," said Karl Sternberg, chief investment officer at Deutsche Asset Management, London.

    But leading U.S. money managers based in London said they participated partly for the kudos, but also because they expect to see increased interest among European clients for long-term, sustainable investment mandates.

    Oliver Bolitho, head of institutional business development for the United Kingdom and Ireland at Goldman Sachs Asset Management, London, said the firm used its submission to the competition "to galvanize our thoughts internally" on the potential for restructuring investment models in the U.K. pension industry.

    Earlier this year, Watson Wyatt Worldwide, Reigate, England, proposed to U.K. pension plans that they consider investing 10% to 15% of total assets in mandates where the manager is given a 10-year management tenure.

    So far, the firm has created eight such mandates — worth a total of €100 million— for U.K. clients, according to Roger Urwin, global head of investment consulting at Watson Wyatt. He would not be more specific.

    But WWW did not submit a proposal to the USS competition because it was already consulting on these issues to its clients and because the contest was not designed for entries from consultants, he added.

    The RFP has generated 88 responses, which have been whittled down to a short list of eight, said Mr. Thamotheram. Winning entries will be announced in October.

    Contest judges

    Judges include Farida Khambata, vice president for portfolio and risk management at the International Finance Corp., Washington; Lyn Hutton, chief investment officer of Commonfund, Wilton, Conn.; and Michael Musuraca, trustee to NYCERS.

    Just less than half of the responses came from money managers, says Hewitt Bacon & Woodrow's Mr. Fitzpatrick. The balance was from academics, consultants and individual money managers replying as individuals. The overall response to the RFP was high, but he said he had expected to see a greater response from money managers.

    Mr. Fitzpatrick said the entrants' names and companies had been taken out before the judges saw them.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    OCIO, Anchor in Rough Seas
    Sponsored Content: OCIO, Anchor in Rough Seas

    Reader Poll

    May 23, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Crossroads: Politics, Inflation, & Bonds
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 23, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference