The GBP400 million London Borough of Brent Superannuation Fund has tendered a GBP130 million global equity mandate currently run by Bank of Ireland Asset Management. The fund is also seeking a currency overlay manager to run up to 3% of its assets. "The current difficult period [BIAM] is going through is one of the reasons for the tender," said Martin Spriggs, the fund's investment manager in Wembley. He confirmed BIAM's underperformance but declined to give numbers.
BIAM has seen several departures since autumn last year, such as Dennis Curran, head of international fund management (GMM, 18/11/04), and has seen several reviews from various pension funds as its performance numbers dipped (GMM, 15/10/04). "It has been six years since we last tested the market," Spriggs added. The fund is expecting BIAM to participate in the tender. Carl McAndrew, head of business development at BIAM in London, did not return calls.
The fund has also decided to rebalance its equity portfolio to a 30/30% weighting between U.K. and international equity, from 25/35% to improve returns and reduce its equity risk, said Spriggs. The global equity mandate will have a performance target of +2% per annum relative to theFTSEAll World Index.
The council could hire the currency overlay manager within the next month. Following an asset allocation review this summer, the fund decided to make changes to improve returns and reduce risk and volatility, explained Spriggs. It uses Watson Wyatt as its investment consultant and Valentine Furniss as its independent financial advisor.
Separately, the fund is seeking to increase its GBP1 million private equity allocation to up to 8% of the fund's value over a period of four to five years. Spriggs said this is in a bid to increase portfolio diversification. It currently uses Westport Private Equity and it is not expecting to hire additional managers.