UK’s Pension Protection Fund readies RI-linked mandates across asset classes

Tenders to focus on sustainable investment opportunities

The Pension Protection Fund, the £14.9bn (€17.4bn) UK pension lifeboat scheme, says it aims to award investment mandates across a range of asset classes – and that candidates’ responsible investment capabilities will be a key part of the procurement.

In a preparatory document sounding out the market, the PPF said it “intends to award contracts (likely via multi-provider frameworks) for the provision of investment management and/or investment advisory services in the next 12 months”.

The PPF is committed to responsible investment (RI) across its portfolio, and says: “As part of procurement and contract management we will assess managers’ ability to comply with our RI policies.”

The core requirements are likely to be for global equities (with an expected focus on low volatility), global bonds (absolute return focus), illiquid assets, private equity, farmland/timberland and advisory services.“In these tenders we may invite strategies that focus on sustainable investment opportunities,” the PPF said, adding that there may be further tenders for other asset classes and services.

“We will assess managers’ ability to comply with our RI policies”

The PPF is currently preparing specifications, with the procurement expected to start from December 2013 at the earliest, for global equities. Other procurements may start next year.

On offer will be initial four-year contracts that have options to extend for periods of up to two years.

The fund is not inviting expressions of interest at this stage “unless suppliers consider that they have a particularly unique offering”. Any responses may be used internally to inform future tenders and gain an understanding of available providers. PPF home page.