Agency FX Trading & Cash Equitization Services

Brunel Pension Partnership (Brunel) is one of eight UK Local Government Pension Scheme pools, bringing together ~£35 billion of investments of ten like-minded funds.

We are seeking a single vendor to provide a number of specific implementation services.

At this stage this opportunity is soft market test only and not a call for competition. The Contracting Authority may or may not subsequently publish a formal contract opportunity notice in the future. The main purpose is to understand how many providers within the market are able to provide both of the below services:

1) Cash Equitization Services We are seeking to "equitize" residual cash within applicable multi-manager funds. This involves applying market exposure through derivatives, retaining access to cash for operational purposes, but attaining market risk premium exposure. Our initial focus would relate to 6 of our equity funds which have average cash balances of 1-2% (see attachment). - We seek a streamlined investment process, minimising work for our inhouse operations team. - Providers must demonstrate specific experience delivering this specific service as a standalone service (not just general futures execution services).

2) Agency FX Trading Our current approach is that most of our underlying asset managers competitively trade their required spot FX transactions on their respective investment mandates, however some FX trading is done by our custodian. Our intention is to leave trading with managers in the majority of instances, but identify an "agency only" FX trading partner, who can be used as an alternative to our custodian in select parts of our portfolio. Accounts to be included within this program would be decided on a case-by-case basis by Brunel's inhouse team. We estimate the typical annual volume which could be traded via this partner to be in the region of $2bn, with a wide range of currencies traded. This could be from somewhere in the region of 30-50 individual manager/client accounts (some of which may sit within our ACS structure, and some may be Non ACS accounts). All transactions need to be traded on an agency only basis, and our preference is to appoint a provider who only trades on an agency basis (i.e. no proprietary trading book within any part of their business, removing conflict of interests).

Additional Services - as we consider the overall suitability and fit of service providers, we are seeking information about the potential wider value add to Brunel. With that in mind, please outline any additional auxiliary services which providers could offer (now or in future), complementing the core services outlined above, and how this would relate to Brunel.

Interested parties are requested to indicate their capabilities for both services requested and return via email to [email protected] by 12pm on the Return Date (April 30 2024).

Queries should be submitted to [email protected] before April 19th 2024.