London Borough of Lambeth is searching for as many as eight managers to run about £575 million ($951 million), including £210 million in a liability-driven investing portfolio, said Harry Musisi, treasury manager.
Following an asset allocation review by investment consultant Xafinity, the £608 million fund’s investment committee in November 2008 voted to implement an LDI strategy using 30% of assets and about three times leverage. Committee members also created a 20% absolute-return allocation and increase real estate to 12% from 8%. Funding came by reducing equities to 33% from 71%. The fund will keep its private equity allocation at 5%, while a 16% allocation to bonds was folded into the LDI strategy.
The fund is also searching for up to two active global equity managers to run a total of £140 million; an active European real estate manager to run £85 million; two hedge funds-of-funds managers to run a total of £70 million; an active currency manager to run £35 million (and passively hedge international equity assets with a notional value of £140 million); and an absolute-return manager (hedge fund or fund-of-funds) to run £35 million.
As of June 30, the fund’s total assets were £608 million, according to meeting minutes. At that time, UBS Global Asset Management ran £245.2 million in a balanced strategy; AllianceBernstein ran £136.1 million in active global equity; Aberdeen Asset Management ran £77.6 million in active global equity and £62.4 million in active bonds; Majedie Asset Management ran £50.6 million in active U.K. equity; RREEF ran £19.6 million in real estate; and Adams Street Partners ran £16.5 million in private equity. Majedie and Adams Street will be retained; all others may rebid, Mr. Musisi said.