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LPFA narrows debt mandate shortlist to four

The pension fund manager has created a new framework for procurement while tendering for the debt mandate.

The London Pension Fund Authority (LPFA) is assessing whether to appoint one or more fund managers to look after a private debt allocation of £100 million to £150 million (€211.4million; $224.8 million).

Apollo Global Management, Ares Management, Babson Capital and GSO Capital Partners were named late last week as potential managers, narrowing the number the pension fund is considering after it ran a tender.

The private debt strategy or strategies are yet undecided and will depend on what managers are appointed, PDI understands.

“We have narrowed our selection of an alternative credit manager down to four. We have not yet decided if the funds will be allocated to one manager or split between a number, but will be making a final decision by the end of March,” Bart Nash, a spokesman for LPFA, told PDI.

Nash said that the LPFA ran a tender after it decided it fell within European procurement rules. There was no existing framework it was able to use, so it decided to liaise with other Local Government Pension Scheme (LGPS) funds and to develop a framework from which similar mini-competitions could be run in the future, he continued.

This saves other LGPS funds from having to establish their own full European tenders, thus saving them time and money, he added. 

The LPFA administers its own £4.8 billion pension fund providing LGPS benefits to almost 20,000 employees working for non-profit, charity, private sector and local government employers and around 35,000 pensioners, many of whom worked for the Greater London Council and the Inner London Education Authority. It also assists other local authorities with all aspects of LGPS administration and provides third party administration services to eight London and county authorities, looking after the pension benefits of more than 250,000 individuals.