Lothian Pension Fund, Edinburgh, is expected to hire Invesco Perpetual to run about £100 million ($164 million) in pan-Asia Pacific equities, said Stewart Piotrowicz, portfolio manager at the £3.5 billion fund.
Funding comes from reducing incumbent Asia Pacific equity manager Baillie Gifford Overseas’ allocation to about £200 million. Baillie Gifford’s contract expired in July. However, Baillie Gifford is expected to be rehired to run the reduced allocation.
Fund officials had no concerns about Baillie Gifford; in the procurement process, fund executives found other managers that could also do the job, Mr. Piotrowicz said.
The fund created a framework agreement with Invesco Perpetual, Baillie Gifford and BlackRock. BlackRock did not receive any funding, however officials will monitor BlackRock's performance over the course of the agreement, which can last as long as 10 years. The agreement allows the fund to easily move assets among the managers — for example, if an investment team left one firm, the fund could avoid a search and simply allocate funds to another manager that was part of the agreement.
No consultant assisted in the search, which began in February.