European Central Bank, Frankfurt, is searching for two money managers to run a combined €960 million ($1.1 billion) in global passive allocations for its pension fund.
The managers will be expected to be able to run global passive allocations in a number of segregated, unitized accounts for equity and fixed-income assets, said an announcement filed on European procurement website Tenders Electronic Daily. Pooled strategies might be considered for some asset classes.
The announcement said that, according to the current strategic asset allocation, investment managers are expected to manage eurozone equities, non-eurozone developed markets equities, emerging markets equities, eurozone sovereign bonds, eurozone inflation-linked sovereign bonds, eurozone corporate bonds and euro cash.
The ECB is looking to split the overall management of the pension fund assets into two separate allocations and contracts. The two managers will receive their contracts at the same time and will have identical allocations in terms of the asset classes in which assets are invested, but “different in terms of both the amount of assets under management at the outset and the pace of growth due to pension contributions.”
This split reflects the central bank’s aim to diversify manager risks, “and to evaluate and manage the contractual performance of the investment managers via periodic reviews for the duration of the contracts.”
The first allocation is expected to have assets of €360 million; while the second is expected to have the remaining €600 million.
The ECB could call on the managers to advise on strategic asset allocation weights and potential ways of incorporating a socially responsible investment approach.
Initial contracts are set to run eight years, with the potential for a two-year extension. They are expected to start around the first quarter of 2017.
Proposals are due Jan. 25, and further information is available on TED.
Spokesmen and executives at the ECB could not be reached for comment by press time. Further details on the pension fund, and current money managers, could not be learned by press time.