Danish pension provider, Lønmodtagernes Dyrtidsfond (LD), has tendered a dedicated €70m environment and climate equity mandate as part of a plan for a huge outsourcing of the management of around 90% of its assets, worth around €5-6bn.
LD is a signatory to the United Nations Principles for Responsible Investment, suggesting that PRI signatory managers will be looked on favourably in mandate pitches. After the initial broad tender announcement earlier this year, LD’s chief financial officer Lars Wallberg told Responsible Investor that the fund was getting a “lot of attention from industry and media” and that ESG factors would play a role in the mandates. The Copenhagen-based fund is tendering 12 mandates with a duration of 48-months for active management across bonds, equities and money markets – the first tendering of mandates since it was set up. The tender is happening because LD’s existing tied investment contract with its subsidiary LD Invest expires at the end of this year.The tender notice states that both Danish and international firms will be able to compete to run the assets. LD has signed up Swiss consultant PPCmetrics to evaluate the bidders.
LD’s chief executive Carsten Koch, said: “We expect that more than 100 companies may apply for prequalification, and it is crucial that all applicants are given equal status and that the evaluation is fair and rigorous,” saidThe fund said the mandate duration of 48 months was set up so that managers don’t “rest on their laurels”. LD expects to have completed the prequalification stage during the second quarter of this year with final allocations taking place after the third quarter.
The full mandate tender is:
- Environment & climate equity €70m
- Danish high grade bonds (x2): €1.15bn
- Global inflation linked bonds €70m
- Danish short-term bonds €110m
- Credit investments €500m
- Danish money market instruments €50m
- Global equity (x2) €575m
- Danish equity (x2) €385m
- Emerging markets equity €200m
LD has been divesting equity and real estate recently, with the equities portion of the fund declining from 52% of the portfolio at the start of 2004 to 35% at the end of 2009.