Taiwan Labor Pension Fund, Taipei, is searching for nine managers to run a combined $2.7 billion, said Michael Chen, head of foreign mandates at the $39.3 billion plan.
The labor fund's $20.8 billion New Labor Pension Fund, one of two plans in the overall pension fund, is searching for three managers to run a total of $900 million in active global listed real estate equity, and two managers to run a combined $600 million in passive global fundamental equities.
The labor fund's $18.5 billion Old Retirement Fund is searching for four managers to run a combined $1.2 billion in passive global fundamental equities. Each manager selected is expected to run $300 million. Funding will come from cash.
Passive global fundamental equity managers will be benchmarked to the FTSE RAFI All-World 3000 index, with a tracking error of less than 0.5%.
It is the fund's first move into fundamental indexed equity.
“We saw some evidence from the past five years that fundamental indexes had performed well, so we think … it may perform well also in the coming years,” Mr. Chen said.
Active global listed real estate equity managers are expected to outperform the FTSE EPRA/NAREIT Global Real Estate index by at least 200 basis points in average annualized rolling three-year returns. Tracking error is to be kept between 4% and 8%.
Proposals for all the searches are due March 29, with selections expected in May. The RFPs are available on the fund's website at http://w2.lpsc.gov.tw/index1-2-1.asp.