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Taiwan’s BLF hires European, US firms for US$2.3 billion bond mandate

BLF
By Hui Ching-hoo   
October 22, 2020

Taiwan’s Bureau of Labor Funds (BLF), which supervises seven worker pension funds, has hired five European and US asset managers for a US$2.3 billion corporate bond mandate focused on sustainable investing.

This is the pension supervisor’s third environmental, social and governance (ESG) mandate since 2017.

The tender for the new mandate was opened in July and the winning bidders are Frankfurt-based DWS Investment Americas, Inc., London-based Insight Investment Management (Global), J.P. Morgan Asset Management (UK), PIMCO Asia, and US bond manager Western Asset Management Company.

They will each be appointed for a five-year term, the BLF says in a statement on October 20.

The managers will each oversee $460 million of investments, split into $400 million for the Labor Pension Fund, Taiwan’s largest pension plan, and $60 million for the National Pension Insurance Fund, which covers old age and disability protection.

The mandate is benchmarked against the Bloomberg Barclays Global Aggregate Corporate USD ex Controversial Industry Index.

The tender had originally been planned for earlier this year. It was delayed because of the coronavirus pandemic as some foreign applicants couldn’t travel to Taipei for presentations, Liu Li-ju, deputy director general of the BLF, said in an interview with Asia Asset Management in July.

The BLF outsourced a $2.4 billion global ESG equity mandate to four international managers in 2017, and followed up in 2018 by hiring seven Taiwanese managers for a NT$42 billion ($1.43 billion) domestic ESG equity mandate.

The BLF had around NT$4.45 trillion of total assets as of end-August 2020.