On the go: The Brunel Pension Partnership has called for pitches from managers of both multi-asset credit and sterling corporate bonds, seeking to deploy some £2.7bn of local authority pension capital.
The Local Government Pension Scheme has largely completed the first stages of its investment pooling project, with pools such as the £30bn Brunel seeking to diversify the range they offer their partner funds.
Brunel's MAC tender is for a £1.5bn fund, which will invest "in a variety of specialist bond sectors, such as high-yield corporate bonds, bank loans, asset-backed securities and emerging market debt", according to the pool.
The investment will target both a pickup in yield and diversification relative to more vanilla investment-grade bonds, with a return target of between 4 and 5 per cent in real terms.
The offering will be managed through Brunel's ACS platform, developed in conjunction with FundRock. The formal launch is scheduled for Q1 2021.
“Multi-asset credit provides an exciting opportunity for our clients to gain access to sub-investment-grade credit in a diversified and understandable manner, with strong ESG integration” said Daniel Spencer, senior investment officer.
The pool has also launched a tender for investment-grade fixed income managers, with plans to allocate £1.2bn of client money.
Managers will be mostly limited to securities included in the the iBoxx Sterling Non-Gilts All-Maturities Bond index, but are expected to deliver active returns that fall in line with the pool's well publicised policies on climate change and other environmental, social and governance risks. Some alternative securities will be permitted in order to juice returns.
The pool said it would accept submissions from managers using a buy-and-maintain approach, despite the fact that these managers do not typically reference a benchmark in their performance assessments.
Stephanie Carter, senior investment officer at Brunel, said: “From the tender process, we will be looking for evidence of strong credit analysis, considered portfolio construction and robust ESG integration.”
