Client request:
This large corporate scheme wanted to assess the way illiquid investments (such as private equity, infrastructure and real estate) were managed and select an external delegated CIO for this part of the portfolio.
Our approach:
• We helped the Trustees define their preferences and specific investment beliefs for private equity, infrastructure and real estate.
• Subsequently the levels of delegation and escalation procedures were agreed along with a set of criteria .
• Based on this information Avida designed a request for information tailored to the client’s situation. A long list of 24 world class providers was agreed.
• Based on a first screening the list was reduced to five providers, including a global investment consultant, a large fiduciary manager, a specialist manager and a peer pension fund with large internal team, open for a partnership.
• Each provider was invited for an in-depth interview, followed by a detailed due diligence and on-site visit.
• Fees and contract were negotiated and the best partner selected.
Deliverables for the client:
• Appointment of a Delegated CIO for illiquid investments, who fits well with the pension fund’s organisation and beliefs.
• Clear definition of the level of delegation and mandate.
• Higher market access to scarce investment opportunities.
• Better risk control and grip on external specialist managers with bespoke and specialised tools.
• Better organisational continuity and less key man risk in this complex area.
The appointment took less than six months and provided the pension fund with a best-in-class sustainable solution.