LaSalle Investment Management has won an £850m Greater Manchester Pension Fund property mandate in an historic break with tradition.
The investment manager will take over management of GMPF’s existing £351m direct property allocation and will also be responsible for investing a fresh £500m property allocation.
GMPF currently internally manages its direct property holdings, of which 65% comprises retail. It made its first allocation to property in 1986.
The decision to outsource was taken because the fund did not have the internal resources to grow the portfolio.
LIM beat off shortlisted rivals DTZ Investment Management and CBRE Global Investors to win the brief, which will see it build up a balanced portfolio that tracks the IPD/IPF benchmark.
The mandate runs for 10 years with an option to extend by five years and triennial fee reviews.
The terms of the brief, which was tendered in the third quarter of last year, meant that only firms managing UK assets exceeding £3bn would be considered.
The authority, which invests on behalf of 10 local authority pension schemes, including Wigan and Stockport, has also just re-awarded management of its £300m Greater Manchester Property Venture Fund.
Property consultant GVA ?has retained the mandate to manage the fund for seven ?years with an option to extend by two years. The fund focuses on asset management and development in the North East.
GVA was appointed as manager to the vehicle in 2007. The mandate came up for a periodic review last quarter.
GMPF also has £137.2m of indirect investments in funds including Henderson’s Central London Office Funds 1 and 2 and Legal & General’s Leisure Unit Trust.
Property currently makes up 7% of the fund’s £12.6bn total assets, split between direct holdings and funds. This will increase to 10% in the medium term with the new LIM award.
sophia.furber@estatesgazette.com
