China’s central pension fund recruits foreign managers

Appointing foreign investment managers for the first time, China’s $US30 billion National Council of Social Security Fund (NCSSF) late last year dealt 12 new mandates to 10 foreign managers to spearhead its drive into overseas markets.

Cerulli Associates reports an initial $1 billion will fuel the mandates, reportedly sized between $US50 million and $US100 million, which have been given to the following managers: * BlackRock: global fixed income active management; foreign exchange cash management mandates; * Alliance Bernstein: global fixed income active management; global (ex-U.S.) active equity management mandates; * Pimco: global fixed income active management mandate; * AXA Rosenberg: global (ex-U.S.) active equity management mandate; * State Street Global Advisors: global (ex-U.S.) active equity management mandate; * Allianz: Hong Kong equity active management mandate; * Invesco: Hong Kong equity active management mandate; * Jointly, UBS Global Asset Management and China International Capital Corporation: Hong Kong equity active management mandate; * Janus Intech: U.S equity index enhanced mandate; * T. Rowe Price: U.S equity index enhanced mandate. The NCSSF intends to distribute more funds to these managers during 2007. The appointments follow the overseas investment guidelines that NCSSF and its investment consultant, Mercer Investment Consulting, set in early 2006. In September, NCSSF enlisted Northern Trust Corp. and Citigroup as global custodians for money invested overseas. Established in 2000 by the central Chinese government to back-up poorly funded provincial pension schemes, NCSSF first dealt mandates to six domestic managers during 2002-03, and another four mandates to domestic managers in November 2004.