North Yorkshire Pension Fund, Northallerton, England, is searching for managers to run a potential 3.3% to 5% of total assets in insurance-linked securities.
The £3 billion ($4.2 billion) pension fund "is carrying out an urgent review of its investment portfolio in light of interest fluctuations and performance of some of its fund managers," said a notice filed with European procurement website Tenders Electronic Daily. "This has proven to be more turbulent as the U.K. conducts its Brexit negotiations and the pension fund committee wishes to mitigate the risks associated with this at short notice."
To remove some of its exposure to the risks, executives at the pension fund want to introduce new, lower-risk asset classes into its portfolio and are considering an investment in insurance-linked securities. The notice said the asset class can only be accessed twice per year, with the next intake in June. "To mitigate against risks as soon as possible, the fund will need to be in a position to invest in this intake."
The allocation under consideration is equivalent to between £110 million and £165 million. It will be funded from the pension fund's equity portfolio following recent "material improvement in the fund's solvency level."
Any contract will run for an initial three years, with seven possible one-year extensions. Proposals are due Feb. 2. A hiring date was not provided.
Spokesmen for North Yorkshire council could not be reached for comment.