The Pension Benefit Guaranty Corporation (PBGC) is searching for fixed income managers to run mandates on its Smaller Asset Managers Pilot Program.
The US’ lifeboat for bankrupt company defined benefit plans has issued a request for proposals to relatively small managers who wish to run active US fixed income portfolios.
“The Smaller Asset Managers Pilot Program creates new opportunities for such firms by reducing the required amounts of the assets they manage and their mandates,” the PBGC said.
Allocations will range from $50 million to $250 million, and only companies with more than $250 million already under management will be eligible to apply.
“Before the pilot program, these contracts were out of reach to the firms because the minimum amounts of the investments, often in the billions, were too large for the firms to accommodate,” the agency said.
The lifeboat announced the programme earlier this month and hosted a pre-bidder’s conference to help smaller asset managers understand the process it uses to select funds.
It is expected to award two or three contracts this year, with a maximum of five being allocated as part of the pilot programme.
The pilot follows several emerging manager programmes initiated by large US public pensions in recent years.
Across its various funds and portfolios, the PBGC manages around $80 billion and each year pays out more than $5.6 billion to members of pension funds it has taken under its auspices.
Details of the mandates to be issued can be found on the Federal Business Opportunities website. Proposals are expected by August 18.
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