More than 200 investment managers have applied for mandates to manage one or more of the 14 sub-funds of the National Pension Reserve Fund. At the end of this year overall fund will top €8 billion, rising to the equivalent of €41 billion by 2025.
Many managers submitted multiple applications for the various mandates available and so the final number of applications was just under 600, according to the National Treasury Management Agency (NTMA), the body responsible for the fund's overall management and for the selection process. The mandates are the contracts to manage aspects of the funds.
Some managers are understood to have applied to manage as many as 12 sub-funds.
According to Ms Deborah Reidy of the NTMA, who oversees the manager selection process, all "main" Irish fund managers have applied for mandates, despite speculation that their chances of winning were slim when faced with foreign competition. It is thought the relatively simple initial application procedure involved may have persuaded Irish managers they had little to lose by participating.
But with Irish firms comprising more than 7 per cent of the managers applying, the odds on many of the estimated 15 Irish managers managing a sub-fund is still thought to be quite low. The process is subject to the EU directive on the procurement of services for public funds.
"The directive, in a nutshell is about public funds not favouring the local market, nor discriminating against it," said Ms Reidy.
"Some Irish managers are very good at the individual mandates they have applied for. But we need to even-handedly go through and score each of the individual responses one against the next without taking note of where they are located."
The overall geographical spread of applications is also not yet known. It is understood many US managers have applied through their UK offices.
"Therefore, a lot of the addresses say, for example, London. So if you go by that, it's actually a bit misleading because that would imply that it's a UK manager when, in fact, it is a US manager. It needs a little bit more analysis," said Ms Reidy.
The next stage of the selection process begins as soon as the NTMA matches paper applications with electronic applications already received. This could take up to two weeks. Ms Reidy expects five to 20 managers to reach the next stage for each sub-fund.
Among the selection criteria are five-year performance data and an ability to manage a fund of the size applied for. In light of this, it is believed Irish managers may have a greater chance of winning one of the equity mandates to be awarded.
The qualifying investment houses will then be asked in detail about their investment style and philosophy.
A shortlist of three candidates will then be drawn up for each sub-fund by the NTMA and its US-based consultants, Frank Russell Consultants.
The final selection of one manager per sub-fund will be made in the autumn, according to Ms Reidy.
