Brunel Pension Partnership Limited (Brunel) has launched a search for managers for its c.£1.2 billion Sterling Corporate Bond sub-fund.
The portfolio will invest primarily in sterling-denominated bonds, as defined by inclusion in our benchmark, the iBoxx Sterling Non-Gilt All-Maturities Bond index. The intention is to gain exposure to sterling bond markets and the credit risk premium, with additional returns from manager skill. We look forward to seeing how managers align their submissions with Brunel’s Climate Change Policy.
Brunel will consider both active and buy-and-maintain approaches and individual managers may submit up to two tenders as appropriate. While proposed strategies should align with our performance expectations of 1% excess returns (net) relative to the benchmark, we may consider buy-and-maintain submissions with alternative outperformance targets, given such strategies are not managed relative to benchmarks. We will not, however, consider quantitative approaches.
The deadline for receipt of tenders is 11am GMT on Monday 17 August 2020. Prospective managers should contact Brunel at [email protected] to receive the briefing document and a submission template.
“The Sterling Corporate Bond portfolio enables our clients to access a highly diversified fund, with a broad spectrum of holdings across a range of maturities,” says Stephanie Carter, Senior Investment Officer at Brunel. “From the tender process, we will be looking for evidence of strong credit analysis, considered portfolio construction and robust ESG integration.”
“The scope of the portfolio will provide access to fresh investment opportunities and enhances diversification for our fund, while ensuring ESG principles remain central,” says Sean Collins, Service manager (pensions) at Oxfordshire County Council.
The Sterling Corporate Bond portfolio aims to exploit the credit risk premium. We expect the sub-fund to include exposure to securitised debt and some off-benchmark bonds (such as unrated bonds, high yield bonds and non-sterling bonds) in order to enhance returns.
The Sterling Corporate Bond portfolio size will be approximately £1.2bn, to be allocated between the selected managers. The sub-fund will be delivered through the ACS platform Brunel has developed in conjunction with FundRock. The formal launch is scheduled for Q1 2021.
Brunel are being assisted throughout the process by consultants from Mercer and Inalytics.
Fund managers who haven’t yet submitted details should email [email protected] to receive the briefing document and a submission template. The email subject should be: ‘Sterling Credit ITT Documentation Request’. If an acknowledgement is not received within 48-hours, please phone us on 07458 144759.
For more information or high-resolution images, please email to [email protected]
Brunel Pension Partnership Limited (Brunel) brings together circa £30 billion investments of 10 likeminded Local Government Pension Scheme funds. We believe in making long-term sustainable investments supported by robust and transparent process. We are here to protect the interests of our clients and their members. In collaboration with all our stakeholders we are forging better futures by investing for a world worth living in.
Brunel is one of eight national pooled funds and manages the investment of the pension assets for the funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Environment Agency, Gloucestershire, Oxfordshire, Somerset and Wiltshire.
Find out more at www.brunelpensionpartnership.org