Labour Pension Fund awards $1.5 billion of overseas mandates
Templeton and AllianceBerstein score big wins. Newton and Goldman Sachs Asset Management also secure mandates.
TaiwanÆs Labour Pension Fund has awarded four fund management companies mandates to run its global equities and global fixed-income portfolios. Each equity or fixed income mandate is sized at $250 million.
A total sum of $1.5 billion has been outsourced in this first round of bidding under the fund's New System.
Templeton and AllianceBerstein have scored big wins, each scoring both the equity and fixed income mandates. Those mandates are good for four years, with an option to renew.
Goldman Sachs Asset Management received a mandate to run a global fixed-income portfolio while Newton received a mandate to run a global equities portfolio.
JPMorgan in Hong Kong was chosen to become the overseas custodian under a five-year renewable mandate.
David Chang, regional head for Greater China at Franklin Templeton, says the Labour Pension FundÆs investment committee focused on investment philosophy and track records when making their selection.
The Labour Pension Fund had inflation on its mind when it held discussions with the fund management houses. The fund hopes to gain a broader spectrum of alpha bets to cover its fast expanding liabilities. Fund managers are allowed between 200 and 800 basis points off-benchmark tracking error to maximise a portfolioÆs performance.
"The team had discussions with the client on how they could use inflation-linked securities as part of a full suite of tools because off-benchmark bets will be a source of performance," says Oliver Bolitho, head of Asia ex-Japan at Goldman Sachs Asset Management. "We felt that we could achieve the target within the risk budgets, using the diversified sources of alpha.ö
Eddie Huang, executive director of institutional sales at Goldman Sachs Asset Management in Hong Kong, notes that Taiwan has become an attractive place for foreign fund management houses to target.
"We are seeing significant changes in the structure of investment guidelines in Taiwan and a lot of progress in the structuring of investment management agreements. This will continue to attract foreign asset managers to compete for Taiwan pension mandates, which is positive for the region's further development of the asset management industry," Huang says. ôSome of the public pension funds have already started to move into more specialised mandates to focus on things such as Europe equities, Japan equities and emerging markets.ö
As of February 2008, the Labour Pension Fund had a total asset size of $15.32 billion under its defined-benefit Old System prior to reforms implemented in 2005. Since the implementation of the New System, it has accumulated $8.9 billion of new assets. The two systems are ranked number 91 and 150 respectively in the AsianInvestor top 200 Asian institutional investors ranking of 2007.
Allianz Global Investors, UBS Global Asset Management, Fidelity and Invesco were the international managers that received mandates from the Old System in June 2007.
A total sum of $1.5 billion has been outsourced in this first round of bidding under the fund's New System.
Templeton and AllianceBerstein have scored big wins, each scoring both the equity and fixed income mandates. Those mandates are good for four years, with an option to renew.
Goldman Sachs Asset Management received a mandate to run a global fixed-income portfolio while Newton received a mandate to run a global equities portfolio.
JPMorgan in Hong Kong was chosen to become the overseas custodian under a five-year renewable mandate.
David Chang, regional head for Greater China at Franklin Templeton, says the Labour Pension FundÆs investment committee focused on investment philosophy and track records when making their selection.
The Labour Pension Fund had inflation on its mind when it held discussions with the fund management houses. The fund hopes to gain a broader spectrum of alpha bets to cover its fast expanding liabilities. Fund managers are allowed between 200 and 800 basis points off-benchmark tracking error to maximise a portfolioÆs performance.
"The team had discussions with the client on how they could use inflation-linked securities as part of a full suite of tools because off-benchmark bets will be a source of performance," says Oliver Bolitho, head of Asia ex-Japan at Goldman Sachs Asset Management. "We felt that we could achieve the target within the risk budgets, using the diversified sources of alpha.ö
Eddie Huang, executive director of institutional sales at Goldman Sachs Asset Management in Hong Kong, notes that Taiwan has become an attractive place for foreign fund management houses to target.
"We are seeing significant changes in the structure of investment guidelines in Taiwan and a lot of progress in the structuring of investment management agreements. This will continue to attract foreign asset managers to compete for Taiwan pension mandates, which is positive for the region's further development of the asset management industry," Huang says. ôSome of the public pension funds have already started to move into more specialised mandates to focus on things such as Europe equities, Japan equities and emerging markets.ö
As of February 2008, the Labour Pension Fund had a total asset size of $15.32 billion under its defined-benefit Old System prior to reforms implemented in 2005. Since the implementation of the New System, it has accumulated $8.9 billion of new assets. The two systems are ranked number 91 and 150 respectively in the AsianInvestor top 200 Asian institutional investors ranking of 2007.
Allianz Global Investors, UBS Global Asset Management, Fidelity and Invesco were the international managers that received mandates from the Old System in June 2007.
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