Taiwan’s Public Service Pension Fund has issued an invitation to firms to submit proposals for global infrastructure equity and global real estate equity mandates, according to an announcement posted on its official website.
PSPF will choose two managers for each asset class, with each of the managers receiving a $150 million mandate. The mandates will be for five-year terms and the target return is 100bp net investment return above the benchmark. Fund managers would be required to limit the realised tracking error to below 8%.
The benchmark for the real estate mandate is the FTSE EPRA/NAREIT Global Index and the benchmark for the infrastructure one is the UBS Global 50/50 Infrastructure & Utilities Index. The return sought is total return net of reinvested dividends. PSPF will conduct quarterly reviews starting one year after the mandates are awarded.
Firms would be able to invest in stocks listed on securities exchanges, including real estate investment trusts, but not exchange-trade notes, OTC stocks, beneficiary certificates, exchange-traded funds and derivative financial products for hedging purposes or investment enhancement purposes, among other restrictions.
Investment into mainland China would be limited to listed securities and could not exceed 10% of the mandate.
Managers must have been established for more than three years and manage more than $5 billion of assets for institutional clients as of last month. PSPF wants to see a three-year track record of benchmark-beating performance. Management fees are negotiable.
Applicants should have a client service team comprising more than three people and submit a biography of their client servicing group. The deadline for submissions is September 1.
The selection process, which PSPF expects to take around 60 working day, is composed of four stages. PSFP will first short-list qualified fund managers, then review the proposals, discuss management fees and finally sign the contracts.
PSFP has AUM of NT$587 billion ($19.6 billion) as of June, of which 30% is outsourced. Last year, it issued mandates totalling $1 billion based on smart-beta equity strategies.