In a continuing trend for large Taiwanese institutions to invest offshore, the Public Service Pension Fund has split $1 billion in four-year equity mandates among five foreign fund managers.
The $18 billion fund, a mandatory defined-benefit scheme for civil servants, has given a $200 million global equity portfolio to each of three managers: Allianz Global Investors, Invesco and Schroder Investment Management.
The other $400 million is split equally between JP Morgan Asset Management and Swiss firm Vontobel for managing global emerging-market equities.
The benchmark chosen for the three global equity mandates – the FTSE All-World – marks the first time the PSPF has used an index provider other than MSCI for this purpose, as reported by AsianInvestor. For the EM equity portfolios, the fund is using the MSCI emerging markets IMI ex-Taiwan.
The PSPF has been unhappy with some of its fund managers' performance in recent years. More than half of the external investment managers to which it awarded domestic mandates in 2009 have failed to hit return targets, PSPF chairman Chang Che-shen told AsianInvestor earlier this year. That said, he did admit the benchmarks may have been too tough.
Still, some managers have been selected again. Allianz GI and Schroders each previously received a $250 million global developed-equity mandate from the PSPF at the start of last year, along with Fidelity and UBS Global Asset Management.
This is also not the first time Vontobel has seen success in Taiwan, having won a four-year contract to manage a $250 million global EM equity portfolio from the $39 billion Labour Pension Fund in August, as reported by AsianInvestor. Esemplia and Morgan Stanley Investment Management picked up the other two $250 million mandates for what were the LPF’s first EM portfolios.