Contract

Equity Overlay / Downside Risk Management

  • Wirral Borough Council

F03: Contract award notice

Notice identifier: 2023/S 000-034571

Procurement identifier (OCID): ocds-h6vhtk-03928d

Published 22 November 2023, 2:59pm



Section one: Contracting authority

one.1) Name and addresses

Wirral Borough Council

Wallasey Town Hall, Brighton Street

Wallasey

CH44 8ED

Email

tenders@wirral.gov.uk

Telephone

+44 1516062002

Country

United Kingdom

Region code

UKD74 - Wirral

Internet address(es)

Main address

http://www.wirral.gov.uk/

Buyer's address

http://www.wirral.gov.uk/

one.2) Information about joint procurement

The contract is awarded by a central purchasing body

one.4) Type of the contracting authority

Regional or local authority

one.5) Main activity

General public services


Section two: Object

two.1) Scope of the procurement

two.1.1) Title

Equity Overlay / Downside Risk Management

Reference number

DN645549

two.1.2) Main CPV code

  • 66000000 - Financial and insurance services

two.1.3) Type of contract

Services

two.1.4) Short description

The Local Government Pension Scheme (LGPS) is a national scheme administered on a local

basis by Wirral Council as the administering authority for the Northern LGPS.

The Fund is governed by the Superannuation Act 1972 and the Public Services Pensions Act

2013. The Fund is administered in accordance with the following secondary legislation:

- the LGPS Regulations 2013 (as amended)

- the LGPS (Transitional Provisions, Savings and Amendment) regulations 2014 (as

amended)

- The Occupational and Personal Pension Scheme (Administration) Regulations 2008

- the LGPS (Management and Investment of Funds) Regulations 2016

- the Public Services Pensions (Information about Benefits) Directions 2014.

Northern LGPS is a partnership between the Greater Manchester (GMPF), Merseyside

(MPF) and West Yorkshire (WYPF) Local Government Pension Scheme (LGPS) funds.

Formerly known as 'Northern Pool', it is one of Britain’s largest public investment funds, with combined assets under management of £46bn. Northern LGPS represents about a fifth of

total LGPS assets, has approximately 880,000 members and over 1,100 contributing

employers.

Northern LGPS’s purpose is to ensure the assets of its funds perform effectively so that

members receive a pension that enables them to enjoy their retirement in dignity.

3. Scope of the opportunity

Northern LGPS is seeking to control equity risk on a medium-term basis and possibly on a

longer-term strategic basis through the use of an equity overlay solution(s).

Northern LGPS is looking to renew its framework of approved equity overlay suppliers to

offer overlay management services as required during the framework duration. It is

anticipated that mandates will be awarded on an individual basis to suppliers within this

framework as required by the underlying plans.

Suppliers must be able to offer equity risk / drawdown control through a broad range of

overlay solutions ranging from basic put / put-spread protection through to more complex

strategies (as required by individual awards within the framework), and may also be required

to offer mechanisms for funding (e.g. synthetic equity replication or other funding routes).

The approved supplier framework will target a minimum of 3 manager appointments.

Northern LGPS are seeking proposals from asset managers. Bank or other non-fiduciary

solutions will be excluded.

Suppliers must be able to implement solutions using their own trading relationships.

Proposals requiring use of client ISDAs will be excluded.

Suppliers must be regulated to offer services to UK institutional investors.

It is estimated that the Northern LGPS will seek to deploy Equity Risk Overlay mandates on

up to GBP 3bn initially. This figure represents the client's total equity exposure that might be

referenced by overlay proposals.

Individual mandates within the framework are expected to vary in sizes ranging from GBP

100m to GBP 2bn, with the framework expected to deploy multiple overlay solutions over

time. There is also the potential for aggregate mandate size to grow through the

incorporation of other asset classes over time.

Subject to there being a sufficient number of responses meeting the selection criteria,

Northern LGPS will select the 10 top scored qualified suppliers to be invited to tender.

Once the framework has been awarded, each individual Fund will run their own further

competition between the successful suppliers on the framework when each individual

requirement arises.

The overall estimate contract spend of £7,236,000 is the estimated spend over the life time of the framework and it is unknown how much will be awarded to each supplier as this will be determined by each further competitions when an individual need arises

two.1.6) Information about lots

This contract is divided into lots: No

two.1.7) Total value of the procurement (excluding VAT)

Value excluding VAT: £7,236,000

two.2) Description

two.2.3) Place of performance

NUTS codes
  • UKD74 - Wirral

two.2.4) Description of the procurement

The Local Government Pension Scheme (LGPS) is a national scheme administered on a local

basis by Wirral Council as the administering authority for the Northern LGPS.

The Fund is governed by the Superannuation Act 1972 and the Public Services Pensions Act

2013. The Fund is administered in accordance with the following secondary legislation:

- the LGPS Regulations 2013 (as amended)

- the LGPS (Transitional Provisions, Savings and Amendment) regulations 2014 (as

amended)

- The Occupational and Personal Pension Scheme (Administration) Regulations 2008

- the LGPS (Management and Investment of Funds) Regulations 2016

- the Public Services Pensions (Information about Benefits) Directions 2014.

Northern LGPS is a partnership between the Greater Manchester (GMPF), Merseyside

(MPF) and West Yorkshire (WYPF) Local Government Pension Scheme (LGPS) funds.

Formerly known as 'Northern Pool', it is one of Britain’s largest public investment funds, with combined assets under management of £46bn. Northern LGPS represents about a fifth of

total LGPS assets, has approximately 880,000 members and over 1,100 contributing

employers.

Northern LGPS’s purpose is to ensure the assets of its funds perform effectively so that

members receive a pension that enables them to enjoy their retirement in dignity.

3. Scope of the opportunity

Northern LGPS is seeking to control equity risk on a medium-term basis and possibly on a

longer-term strategic basis through the use of an equity overlay solution(s).

Northern LGPS is looking to renew its framework of approved equity overlay suppliers to

offer overlay management services as required during the framework duration. It is

anticipated that mandates will be awarded on an individual basis to suppliers within this

framework as required by the underlying plans.

Suppliers must be able to offer equity risk / drawdown control through a broad range of

overlay solutions ranging from basic put / put-spread protection through to more complex

strategies (as required by individual awards within the framework), and may also be required

to offer mechanisms for funding (e.g. synthetic equity replication or other funding routes).

The approved supplier framework will target a minimum of 3 manager appointments.

Northern LGPS are seeking proposals from asset managers. Bank or other non-fiduciary

solutions will be excluded.

Suppliers must be able to implement solutions using their own trading relationships.

Proposals requiring use of client ISDAs will be excluded.

Suppliers must be regulated to offer services to UK institutional investors.

It is estimated that the Northern LGPS will seek to deploy Equity Risk Overlay mandates on

up to GBP 3bn initially. This figure represents the client's total equity exposure that might be

referenced by overlay proposals.

Individual mandates within the framework are expected to vary in sizes ranging from GBP

100m to GBP 2bn, with the framework expected to deploy multiple overlay solutions over

time. There is also the potential for aggregate mandate size to grow through the

incorporation of other asset classes over time.

Subject to there being a sufficient number of responses meeting the selection criteria,

Northern LGPS will select the 10 top scored qualified suppliers to be invited to tender.

Once the framework has been awarded, each individual Fund will run their own further

competition between the successful suppliers on the framework when each individual

requirement arises

The overall estimate contract spend of £7,236,000 is the estimated spend over the life time of the framework and it is unknown how much will be awarded to each supplier as this will be determined by each further competitions when an individual need arises

two.2.5) Award criteria

Quality criterion - Name: Quality (Written ITT) / Weighting: 60

Quality criterion - Name: Quality (Presentation) / Weighting: 20

Price - Weighting: 20

two.2.11) Information about options

Options: No

two.2.13) Information about European Union Funds

The procurement is related to a project and/or programme financed by European Union funds: No


Section four. Procedure

four.1) Description

four.1.1) Type of procedure

Competitive procedure with negotiation

four.1.3) Information about a framework agreement or a dynamic purchasing system

The procurement involves the establishment of a framework agreement

four.1.8) Information about the Government Procurement Agreement (GPA)

The procurement is covered by the Government Procurement Agreement: Yes

four.2) Administrative information

four.2.1) Previous publication concerning this procedure

Notice number: 2022/S 000-035897


Section five. Award of contract

Contract No

DN645549

A contract/lot is awarded: Yes

five.2) Award of contract

five.2.1) Date of conclusion of the contract

30 September 2023

five.2.2) Information about tenders

Number of tenders received: 10

The contract has been awarded to a group of economic operators: No

five.2.3) Name and address of the contractor

Allianz Global Investors

199 Bishopsgate London

Greater London

EC2M 3TY

Country

United Kingdom

NUTS code
  • UKD74 - Wirral
The contractor is an SME

No

five.2.4) Information on value of contract/lot (excluding VAT)

Total value of the contract/lot: £7,236,000


Section five. Award of contract

Contract No

DN645549

A contract/lot is awarded: Yes

five.2) Award of contract

five.2.1) Date of conclusion of the contract

30 September 2023

five.2.2) Information about tenders

Number of tenders received: 10

The contract has been awarded to a group of economic operators: No

five.2.3) Name and address of the contractor

AXA Investment Manager

7 Newgate Street

Greater London

EC1A 7NX

Country

United Kingdom

NUTS code
  • UKD74 - Wirral
The contractor is an SME

No

five.2.4) Information on value of contract/lot (excluding VAT)

Total value of the contract/lot: £7,236,000


Section five. Award of contract

Contract No

DN645549

A contract/lot is awarded: Yes

five.2) Award of contract

five.2.1) Date of conclusion of the contract

30 September 2023

five.2.2) Information about tenders

Number of tenders received: 10

The contract has been awarded to a group of economic operators: No

five.2.3) Name and address of the contractor

Insight Investment Management

160 Queen Victoria Street

London

EC4V 4LA

Country

United Kingdom

NUTS code
  • UKD74 - Wirral
The contractor is an SME

No

five.2.4) Information on value of contract/lot (excluding VAT)

Total value of the contract/lot: £7,236,000


Section five. Award of contract

Contract No

DN645549

A contract/lot is awarded: Yes

five.2) Award of contract

five.2.1) Date of conclusion of the contract

30 September 2023

five.2.2) Information about tenders

Number of tenders received: 10

The contract has been awarded to a group of economic operators: No

five.2.3) Name and address of the contractor

Morgan Stanley Investment Management

25 Cabot Square

London

E14 4QA

Country

United Kingdom

NUTS code
  • UKD74 - Wirral
The contractor is an SME

Yes

five.2.4) Information on value of contract/lot (excluding VAT)

Total value of the contract/lot: £7,236,000


Section five. Award of contract

Contract No

DN645549

A contract/lot is awarded: Yes

five.2) Award of contract

five.2.1) Date of conclusion of the contract

30 September 2023

five.2.2) Information about tenders

Number of tenders received: 10

The contract has been awarded to a group of economic operators: No

five.2.3) Name and address of the contractor

Schroder Investment Management Limited

1 London Wall Place

Greater London

EC2Y 5AU

Country

United Kingdom

NUTS code
  • UKD74 - Wirral
The contractor is an SME

No

five.2.4) Information on value of contract/lot (excluding VAT)

Total value of the contract/lot: £7,236,000


Section six. Complementary information

six.4) Procedures for review

six.4.1) Review body

Royal Courts of Justice

London

WC2A 2LL

Country

United Kingdom