Brunel Pension Partnership has launched a search for managers for its £1.2 billion Sterling Corporate Bond sub-fund, which is due to launch during the first quarter of next year.
The portfolio will invest primarily in sterling-denominated bonds, as defined by inclusion in the benchmark, the iBoxx Sterling Non-Gilt All-Maturities Bond index.
The fund is expected to include exposure to securitised debt and some off-benchmark bonds, such as unrated bonds, high yield bonds and non-sterling bonds, to enhance returns.
Brunel said it was looking forward to seeing how managers aligned their submissions with the pension pool’s climate change policy.
“The Sterling Corporate Bond portfolio enables our clients to access a highly-diversified fund, with a broad spectrum of holdings across a range of maturities,” said Stephanie Carter, senior investment officer at Brunel. “From the tender process, we will be looking for evidence of strong credit analysis, considered portfolio construction and robust ESG integration.”
While proposed strategies should align with the pool’s performance expectations of 1% net excess returns relative to the benchmark, it may consider buy-and-maintain submissions with alternative outperformance targets, given such strategies are not managed relative to benchmarks.