London Borough of Croydon Pension Fund issued RFIs for four active managers to run a total of up to £500 million ($876 million) — almost all the pension fund’s assets, confirmed Jo Allen, investment consultant at Mercer, which assists the £550 million fund.
Fund officials are looking for managers to run £250 million to £300 million in global equities, £150 million in fixed income, £25 million in a hedge fund of funds and £25 million in a global tactical asset allocation portfolio.
The plan restructured its overall portfolio to reduce risk following an investment strategy review conducted by Mercer that was completed earlier this year, according to Ms. Allen.
Ms. Allen would not say how the assets now are managed, citing client confidentiality. Nigel Cook, Croydon’s divisional director for treasury and pensions, could not be reached for comment by press time.
According to the fund’s latest financial statement for the year ended March 31, 2007, 79% was in equities, 12.5% in bonds, 4% in real estate, 3% in private equity and 1.5% in cash. Hermes Pensions Management ran about two-thirds of the equity portfolio in passive U.K. stocks, and 12.5% of total assets in passive bonds. Since 2007, Hermes has outsourced its index tracking business to Legal & General Investment Management.
UBS Global Asset Management managed 28% of fund assets in passive overseas equities. Other external managers include Pantheon Ventures, running 3% assets in private equity, according to the financial statement. Information on whether UBS and Hermes are invited to rebid was not available.
Proposals are due Oct. 24. Further information can be obtained from Mercer.
