Contract notice: Portfolio management services Tender, Denmark - 42039147

Procurement Summary

Country : Denmark

Summary : Contract notice: Portfolio management services

Deadline : 07 May 2020

Other Information

Notice Type : Tender

TOT Ref.No.: 42039147

Document Ref. No. : 159633-2020

Competition : ICB

Financier : Self Financed

Purchaser Ownership : -

Tender Value : Refer Document

Purchaser's Detail

Purchaser : LØNMODTAGERNES DYRTIDSFOND (`LD PENSIONS`)
Office Name: Lønmodtagernes Dyrtidsfond (`LD Pensions`)
Address: Dirch Passers Alle 27
Town: Frederiksberg
Postal Code: 2000
Contact Point: Kristoffer Fabricius Birch
Denmark
Email :kfb@ld.dk
URL :https://www.ld.dk

Tender Details

Object of the contract
Portfolio management services

Description: Contract notice: Portfolio management services

Authority Type: Body governed by public law
Contact Nature: Services
Procedure: Restricted procedure
Document: Contract notice
Regulation: European Union, with participation by GPA countries
Award criteria: The most economic tender
CPV code: 66140000, 66140000, 66140000
CPV Description: Portfolio management services.

Global Emerging Markets High Conviction Equities

The object of the tender is to select an Investment Manager to manage LD Pensions` assets within global emerging markets high conviction equities. The investment approach must be long term, fundamental stock picking based on a deep understanding of companies in the portfolio and the investment universe, and their environments, including macroeconomic and political environment. The intention is to generate alpha, adjusted for academically tested factors such as value, size, momentum, low-volatility and quality. The mandate is long only.

LD Pensions is selecting one Investment Manager to provide investment management services for the following mandate: Global Emerging Markets High Conviction Equities (expected size DKK 750 million, approx. EUR 100 million). The size of the mandate is indicative due to LD Pensions` inability to determine the volume in advance. It is important that the Product has available capacity of minimum EUR 150 million at the time of signing the Agreement.

The mandate is a segregated account, long-only, and the investment approach is active fundamental stock selection, with a long investment horizon. The objective is to generate robust alpha, adjusted for academically tested factors such as value, size, momentum, low-volatility and quality, by investing in listed global emerging markets equities. The portfolio is concentrated, and consist of equities of all sizes, relatively beta-neutral, with no extreme biases to e.g. momentum, deep value, small cap, high growth or low volatility. ESG should be fully integrated in the investment process, and LD Pensions` exclusion list must be incorporated in the investment restrictions.

A detailed description of the characteristics of the mandate can be found in the Investment Guidelines (Schedule 1 of the Agreement).

Below please find a description of LD Pensions` criteria and preferences for prequalification selection.

Part 1 (Max score 30)

(1) A Reference regarding a client resembling LD Pensions is preferred (institutional investor, same size or larger);

(2) LD Pensions prefers: A Reference concerning a long duration relationship regarding the reference mandate which has not been terminated, a Reference client with volume similar to or larger than LD Pensions` tendered mandate;

(3) Firm capabilities and experience; the description should address all matters described as Relevant, to enable an evaluation of Relevance.

LD Pension prefers:

- long investment horizon; low turnover and name-turnover,

- concentrated, high conviction portfolio,

- a strong, deeply rooted, sensible and long-lived Investment philosophy,

- a relatively beta-neutral portfolio, with no extreme biases,

-all Cap is preferred to Large/Mega-Cap,

- a thorough investment process with a deep understanding of companies in the investment universe and their current and expected future operating environments (incl. macroeconomic and political environment), and a robust valuation framework,

- a process which has existed, and proven to be repeatable, over a long period of time is preferred over a less thorough investment process which has existed over a shorter period of time,

- ESG Integration in the investment process will be evaluated very positively. No ESG integration in the investment process will be evaluated very negatively,

- gradual changes to investment process and/or philosophy are preferred over massive changes,

- benchmark agnostic, conviction based portfolio construction with attention to diversification is preferred over `benchmark hugging`,

- active Share and TE targets close to those of the Investment Guidelines are preferred,

- experience in handling client directed policies (handling of an exclusion list is a minimum requirement for the tender),

- a highly skilled PM and team with a long experience with, and focus on, investing fundamentally in global emerging markets equities is preferred,

- continuity, the current PM must have been lead or co-PM since year end 2014,

- a well-resourced, stable team, with extensive emerging markets experience, dedicated to the investment philosophy and process, is preferred over a less well-resourced, less experienced team, with high team-turnover, accommodating more than one investment philosophy and process,

- a high degree of alignment of long-term interests between PM/team and clients is preferred (such as co-investment or ownership of the company).

Part 2 (Max score 70)

Results are defined as the monthly 63 months returns of a Global Emerging Markets High Conviction Equities composite track record (as of 31 March 2020) for a composite that includes the Reference client`s track record.

The Applicant`s submitted composite will be evaluated with respect to quality (GIPS(r) status of Applicant and composite examination), and representativeness of Reference clients` returns (inclusion and tracking error).

A Reference where the composite shows long-term positive robust alpha generation, adjusted for style betas vs. the relevant benchmark is preferred. LD Pensions` external advisor will perform style beta adjustments along the lines of Fama French`s factor framework. The number of factors and factor definitions may differ from Fama French. Data will be sent to the advisor anonymized.

The most significantly positive and robust alpha will be assigned the highest score of 70. The most significantly negative and robustly low alpha will be assigned a score of zero. The score will be adjusted if the composite characteristics are not of sufficient quality or representative (as previously described).

Part 3

If the Reference client is anonymous and/or related/affiliated to the Applicant (family relationships, as well as direct and indirect corporate relationships), the score for Part 1 and 2 will be halved.


Internet address (URL): https://www.ld.dk

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