Lífeyrissjódur Starfsmanna Ríkisins, the EUR3.3 billion (GBP2.25 billion) pension fund for Icelandic state employees and nurses, will invest an additional EUR150 million in overseas equity this year and may hire managers. “We haven’t decided yet because we have so many [managers]. It is something we are considering,” said Róbert Róbertsson, cio in Reykjavik. No timeframe has yet been set for a decision. Manager performance will determine whether the fund will hire extra managers, however, he said incumbents are performing well.
The move to increase overseas equity will be funded through paring domestic fixed income. This is part of the scheme’s long-term strategy to diversify out of domestic fixed income by 2012. The scheme plans to increase global equity, make a maiden investment in global bonds and increase its private equity allocation (GMM, 4/3/05). It currently invests 27% of the total portfolio in overseas equity and 15% in domestic equity.
Current global equity managers include State Street Global Advisors, Schroder Investment Management, Morgan Stanley Investment Management and Alliance Capital Management. Steen Svendsen, managing director at Schroder, said the firm was always interested in new money. Kanesh Lakhani, head of marketing and European consultant relations at SSgA, could not be reached by press time. Officials at Alliance Capital and Hugh Fraser, spokesman at Morgan Stanley, did not return calls.
Additionally, the fund has selected a private equity fund-of-funds manager to handle a brief worth EUR33-42 million. Róbertsson declined to name the firm until contracts are signed. Separately, the fund may review hedge funds as part of its move to diversify out of domestic fixed income. No timeframe has been set for a decision.