Irish funds fare badly in pension scheme mandate

Irish fund managers have fared poorly in the allocation of the €8 billion National Pensions Reserve Fund, which has been established to meet some of the cost of social welfare and public service pensions from 2025 onwards.

The final mandates were announced by the National Treasury Management Agency (NTMA) yesterday but only two Irish fund managers - Bank of Ireland Asset Management (BIAM) and Irish Life Investment Managers (ILIM) - have received investment mandates.

The NTMA itself is responsible for the management of the fund's euro-zone bond portfolio.

BIAM is part of a joint venture with the US investment group State Street, which is responsible for the passive management of €1.1 billion of euro-zone equities, while BIAM on its own has won one of the mandates to manage €350 million of pan-European equities.

Apart from the €1.1 billion of euro-zone bonds that the NTMA will manage itself, Irish Life has the investment mandate for €420 million of long euro-zone bonds.

That is the only direct Irish involvement in the management of the fund, with the balance being managed by various British, US and European investment houses. The allocation of the investment mandates was conducted under EU public procurement procedures, which meant that no preference could be given to Irish bidders.

The single biggest mandate has gone to Barlcays Global Investors for the passive management of €1.8 billion of European and North American equities.

The other investment mandates are as follows:

North American value equities (€410 million) - Lord Abbett & Co;

North American growth equities (€410 million) - Goldman Sachs;

North American enhanced index equities (€420 million ) - Invesco;

Japanese equities (two €125 million mandates - Daiwa and Morgan Fleming;

Pacific Basin non-Japanese equities (€93 million) - Schroders;

Global equities (two €420 million mandates - Capital and Dresdner;

Pan-European equities (three €350 million mandates) - BIAM, Blackrock International and Putnam.

ABN-Amro Mellon is global custodian for the fund while Morgan Stanley is transition manager.