Taiwan’s BLF to issue $4.4bn in mandates

Jan 15, 2015

The $89 billion Bureau of Labour Funds has invited managers to run new global sovereign credit and equity index portfolios for three of its institutions, as it moves to diversify its assets.

Taiwan’s BLF to issue $4.4bn in mandates

Taiwan’s Bureau of Labour Funds (BLF) is seeking managers for a total of $4.35 billion in assets across 18 segregated mandates – nine for sovereign credit and nine for equity index strategies.

The move is part of the state institution’s investment plan – formulated after it was set up early last year – to further diversify its NT$2.8 trillion ($89 billion) portfolio. It aims to almost treble its alternatives allocation to 6% from 2.3% and raise its overseas exposure to at least 45% from 37% as of April 2014, as reported.

The five-year mandates are planned for three of BLF’s sub-entities: the NT$1.28 trillion Labour Pension Fund (new scheme) (LPF), the NT$616.3 billion Labour Insurance Fund (LIF) and the NT$188.6 billion National Pension Insurance Fund (NPIF).

The enhanced global sovereign credit portfolios will total $1.8 billion, while those for equity indexation will be worth $2.35 billion. Each of the three sub-entities will have three segregated accounts, run by separate managers, for each of the two asset classes.

LPF will allocate a total of $900 million to the credit portfolios and $1.5 billion to the equity index mandates; LIF will have $300 million in credit and $600 million in equity; and NPIF’s allocations will be $600 million in credit and $450 million in equity.

Each mandate must have a track record of at least three years as of December 31, 2014, and each manager must manage at least $5 billion in assets for institutional investors and have a branch, operation venue or service team in Taiwan.

All the requirements for managers are set out in detail on BLF’s website, including conditions, selection criteria and details of how to apply. Submissions must be made by February 9.

BLF also supervises the LPF, LIF, Labour Retirement Fund (the old scheme), Employment Insurance Fund, Overdue Wages Payment Fund and Occupational Incidents Protection Fund.

BLF is responsible for optimal asset allocation and risk control, diversifying investment portfolios in global niche markets and enhancing management efficiency.