Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

BIG THREE REPLACE SPECIALISTS

  • Comment
Specialists PanAgora, GT and M&G have been replaced by three of the biggest council fund managers in a routine revi...
Specialists PanAgora, GT and M&G have been replaced by three of the biggest council fund managers in a routine review by the £600 million Grampian RC pension fund.

Quant specialist PanAgora has been replaced as tactical asset allocator by Morgan Grenfell, ranked fifth in the council fund manager league table. M&G lost its £112m specialist UK equity mandate to Mercury, ranked third in the table, and GT's £14m mandate for the Pacific Basin including Japan went to Schroder, ranked two after PDFM.

Grampian, reviewing the fund with consultants Hymans Robertson and Sedgewick Noble Lowndes, had decided to replace PanAgora with a non-quant manager when its three-year contract ended. GT and M&G, also on three-year rolling contracts, were not able to reapply for their mandates.

The big three, which take up their new briefs this month, were selected because of their size, their track records and their presentations to the investment panel, said investment officer Joanna Hope.

Morgan Grenfell and Schroder already run balanced briefs of £190m each for Grampian, while Mercury manages a £19m specialist European ex-UK portfolio. Oppenheimer remains specialist US manager with a £19m mandate and Abtrust keeps its £10m venture capital brief.

The US specialists will be put to the test early this month when Lincolnshire CC calls on its shortlisted managers to perform a beauty parade for a £35m mandate which was previously managed in house.

Specialist management is to be abandoned by the £426m Buckinghamshire CC superannuation fund, however, when four specialist mandates and their managers are axed early next year and one balanced manager is taken on to run £100m.

Good performance from the managers and outstanding numbers from two meant the weightings of the four specialist briefs - £74m UK, £30m Europe and US, £20m overseas with emerging markets and £10m Japan - run by Baillie Gifford, JP Morgan, Foreign & Colonial and Yamiachi respectively, had fallen out of line, said treasury principal accountant Mick Roxbury.

He said the panel had decided against a tactical asset allocator because of bad press about using derivatives as an overlay and because of the administration of adding a further layer of management.

Three of the managers would bid for the balanced brief, he said. 'But unfortunately, despite the fact they have delivered exactly what they promised, Yamaichi are not capable of offering balanced management.'

PDFM currently manages £193m of the fund while Prudential runs £98m. 'We may up Prudential's so the new balanced manager and the Pru are the same size,' said Mr Roxbury.

The £1.2 billion South Tyneside MBC superannuation fund expects to complete a review of the management arrangements for its £28m European equity portfolio by mid-October.

Loans and investments manager Stephen Moore said incumbent manager Lombard Odier had been included in the shortlist but would not comment on the other final contenders.

South Tyneside has also had to embark on a search fora specialist global bonds manager. The £50m brief is currently managed in-house by Ron Bradford who is leaving.

Meanwhile, PDFM, Mercury and Gartmore will have to retender for their balanced mandates at the £535m Surrey CC pension fund as part of a routine review. PDFM runs 50% of the total fund, while Mercury has a third and Gartmore has a sixth.

Surrey assistant director of resources Michael Taylor said the three incumbents had performed well and beaten the CAPs median. However, he said the fund would test the market using Watson Wyatt as a consultant. The number of managers could change as could the percentages managed by each, he said.

The successful managers will have to convince the investment panel that they have an awareness of ethical investment issues, he said.

Southwark LBC's pension fund is shortlisting candidates for a £25m overseas equities mandate to encompass the US, Europe excluding the UK, Japan, the Pacific Basin and some emerging markets.

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.