Opportunistic Private Markets Asset Allocation - Investment Management Services

Dundee City Council (the Council) as administering authority for the Tayside Pension Fund (the Fund) is launching this procurement for an investment manager to manage 50% of the Fund’s opportunistic portfolio, which forms 10% of the Fund’s assets (this represents 5% of the value of the Fund, circa GBP 250–GBP 290 million). The Fund is seeking a new mandate to compliment an existing alternatives mandate that would invest across a range of private market asset classes (including private equity, private infrastructure, private debt and private real estate debt).

The Fund requires a proportion of the assets to be invested in the UK with a focus in Scotland (investments within Scotland are anticipated to be in the region of at least 10-20% of the total mandate). As well as geographical preferences, environmental and social impact are also key priorities of the mandate, and consideration should be given.

The Council is the administering authority for the Fund. The Fund is part of the Local Government Pension Scheme (LGPS) and is one of the 11 LGPS funds in Scotland and around 100 in the UK.

The Council wishes to appoint an investment manager to manage 50% of the Fund’s opportunistic portfolio, which forms 10% of the Fund’s assets (this represents 5% of the value of the Fund, circa 250–290 million GBP). The new mandate should seek to compliment the Fund’s existing alternatives mandate, and invest across a range of private market asset classes (including, but not limited to, private equity, private infrastructure, private debt, and private real estate debt).

The Council wishes the mandate to have the following characteristics: · Target a return of 8% – 10% per annum (net of all fees). · Be sufficiently diversified, with no one asset class representing more than 40% of the mandate. · Focus on the following asset classes: private equity, private debt, real estate debt and infrastructure (both debt and equity). Additional asset classes will also be considered on a case-by-case basis. · Geographical exposure - investments should be focused on Developed Markets (with currency hedging back to Sterling implementable as required).

The portfolio should also consider local investment opportunities within the UK with a focus in Scotland (investments within Scotland are anticipated to be in the region of 10-20% of the total mandate). · Investment term – it is expected that the mandate will be in place for at least 10 years. · Liquidity - the preference would be for the mandate to offer at least annual liquidity. However, there is an understanding that an initial lock-up period may be required to help build out investments.

The mandate should also be sufficiently liquid to allow further investments to be made, should the Council wish to scale up the size of the mandate. · The Fund wishes to achieve access to best in class investments across asset classes and is open to using external managers to access investments. Where this is proposed, consideration should be given to minimising double layers of fees and providing transparency on the overall cost of the strategy. · Environmental and Social impact are key priorities of the mandate’s objectives, and specific consideration should be given.

More broadly, Environmental, Social and Governance considerations should be integrated throughout the investment process. · Fees – the preference would be for a flat fee structure, with no performance fee element. The contract is being procured using the competitive procedure with negotiation in accordance with the Public Contracts (Scotland) Regulations 2015.

The contract will be entered into between the Council and the successful bidder. The procurement process leading to the award of the contract will comprise the following stages: 1.

Prequalification (SPD) stage 2. Initial tender stage 3.

Negotiation stage 4. Final tender stage 5.

Contract award The procurement documents being issued at this SPD stage are located within the ‘Additional Documents’ area for this particular contract on the PCS Portal. To participate in the procurement, economic operators must submit a completed SPD Questionnaire via the PCS Portal in accordance with this Contract Notice and the instructions in the SPD Guidance document.

This Contract Notice and the SPD Guidance document must be reviewed carefully. Detailed information regarding the later stages of the procurement including the award criteria and evaluation methodology will be provided to the shortlisted economic operators who are invited to submit an initial tender.