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Getting a slice of the Irish pension fundGetting a slice of the Irish pension fundGetting a slice of the Irish pension fund Back  
Asset management companies hoping to get business from the National Pension Reserve Fund (NPRF) are getting closer to finding out who the successful companies will be.

The fund is currently worth E6.5 billion and is estimated to grow by E1 billion annually.

At the end of April the NTMA on the direction of the NPRF Commission appointed Mercer Ltd to advise on investment strategy with respect to the fund. This followed an international tendering competition. Mercer is due to meet the fund’s Commission at the end of June to discuss investment strategy over the short, medium and long term and to identify potential managers. Mercer will provide advise on all aspects of investment strategy including how to split its macro equity and bond investment as well as the divide between active and passive management, the development of an investment benchmark and the tendering of mandates. As it is expected that the fund will outsource a substantial portion of assets to external investment managers there is bound to be strong competition to secure a piece of the pie.

There are seven members of the fund’s commission who will play a supervisory role similar to a board of trustees. The commission is responsible for outlining asset allocation, developing the benchmark and deciding on the managers of the fund. They will work closely with the National Treasury Management Agency (NTMA) on all investment issues.

Speaking recently, Donal Geaney, chairperson of the fund, stated that the Commission’s primary task would be determining the optimum asset allocation and investment strategy for the fund. There are also more practical matters to be addressed. It will be necessary to select investment managers and to appoint custodians to the fund.

The NTMA have taken a step further to completing the practical tasks by appointing Bacon & Woodrow at the end of May to advise on the selection of a global custodian. This again followed an international tender competition in which ten firms were invited to submit bids. Details for the provision of global custody services are available on the NTMA website, www.ntma.ie, under the heading ‘Global Custody Restricted Procedure’. The deadline for submissions is June 27th and a decision is expected by mid summer.

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