Our search for new global equities

22 Nov 2016 Our search for new global equities

The investment team along with colleagues from global equity sub-group of the Investment Advisory Committee have for the last few weeks been holding interviews and clarification meetings with managers in the search for new global equity strategies.

Following the tender process in the autumn, over 200 submissions were received and an initial list of 58 global equity managers were shortlisted for further evaluation to decide which managers should be taken forward for selection by borough colleagues. Included in the nine strategies reviewed were emerging market managers, sustainable equity managers and ‘incubator’ or ‘early stage’ managers.

We were impressed by the quality of managers who submitted proposals and their willingness to offer cost effective products particularly when compared to their standard institutional rates.

Strategies reviewed

In total, nine strategies have been reviewed, with between four and nine managers per strategy being asked for clarification meetings and interviews. The managers were from companies both familiar and less familiar to the LGPS and the final list should provide pension funds with a good range of choices that will meet their asset allocation and investment strategy needs. Many of the managers approach the same strategy but in different ways, and this further increases the attractiveness of holding more than one manager (where appropriate) as the combination can enhance the risk / reward profile for the funds themselves.

The list will be put to the Investment Advisory Committee, and we will update the Pensions Sectoral Joint Committee at its meeting in December. Further, we are currently looking at arrangements for ‘meet the manager’ days for pension committee members and local authority officers.

Schedule for new fund launches

We will shortly be circulating a survey asking funds to indicate where they have a preference for global equity products, so that we can compile a schedule of fund launches to meet the needs of the London local authorities.

We anticipate being in a position to offer new dedicated global equity strategies for three products in the first half of 2017 with further strategies being opened in the autumn and winter as demand arises. The strategies will offer funds greater choice and the opportunity to diversify further should they choose to do so.