Man has been awarded a managed account mandate for initially EUR1.2 billion by Bayerische Versorgungskammer (BVK), Germany’s largest public pension fund with more than EUR50 billion in assets.
Under the agreement, BVK will start allocating funds over the course of 2011. BVK will gain access to Man’s managed account capabilities, with the benefits of increased transparency, liquidity and control which managed accounts offer. Man, which has more than a decade’s experience in managed accounts and has grown managed account assets to over USD8.7 billion[1], will provide services with regards to operational due diligence, manager take-on and risk management oversight for BVK. Bayerische Versorgungskammer will have sole discretion for manager selection and portfolio construction.
BVK is an amalgamation of 12 first and second pillar pension schemes for liberal professions (e. g. doctors, architects, pharmacists), and municipalities. Between them they have more than 1.5m people insured and 308,000 current beneficiaries in Bavaria and other German federal states. By far the largest of the group in terms of assets is the one for doctors, dentists and veterinarians, which has EUR16bn in assets and around 90,000 insured.
“To be awarded a large mandate by a pension fund as progressive and sophisticated as BVK is a huge achievement for Man and testament to the strength of our managed account offering,” says Peter Clarke (pictured), Chief Executive of Man.
A managed account is a fund which is owned by the investor and controlled by independent third party providers. The managed account’s trading strategy typically mirrors the strategy of an existing investment fund, but the investment mandate can be tailored to meet specific portfolio management requirements. Managed accounts aim to deliver control of assets, transparency and independence in comparison to a conventional commingled fund structure.
Dajana Brodmann, Deputy Head of Alternative Investments, at BVK, says: “We undertook a rigorous selection process for our managed account platform provider. Man impressed us with the depth of their expertise, their long standing experience with managed accounts and robustness of their risk management processes. Another important factor for our decision to select Man was the fact that it is an independent company. We look forward to a long lasting and successful partnership.”
