CONSAR, the Mexican regulatory authority for pension funds, has given the green light to the funding of US$400mn for the European equity mandate which Afore Banamex awarded to Pioneer Investments in October 2013. The total amount of the mandate, which was also awarded to BlackRock, BNP Paribas, Franklin Templeton, and Schroders, is for US$1bn. As Gustavo Lozano, director of Pioneer Investments in Mexico, confirmed to Fund Pro, the contract between the asset management company and the Afore will be signed this week.
Pioneer Investments is the second firm which obtains the funding of a mandate, after the two Afore Banamex mandates awarded to Schroders, in global and European equities, which have been funded already.
Meanwhile, in a telephone conversation with Funds Society, Gustavo Lozano expressed his great satisfaction at having received authorization for this mandate by the regulator as “that means that a Mexican Afore now has two managers,” adding that “in two to three weeks, once the contract is signed, the transfer of funds will occur.”
CONSAR’s president, Carlos Ramirez Fuentes, has reaffirmed an opinion which he has already stated on other occasions, that the mandates are an important vehicle for diversifying the management of Afore's assets, but that the process should be more streamlined. In this case, although the mandate was awarded a year ago, they have been unable to fund it until now, so a very significant part of the rally experienced by European equities has been missed. Gustavo Lozano commented to Funds Society in this regard that all parties involved “have learnt a lot from this process and are working in conjunction with authorities, the different funds, and the asset management firms so that these investment projects become more agile and may be funded within a maximum period of six months from time of awarding.”
As was disclosed to Funds Society, certain constraints and problems posed by State Street, the mandate’s trustee and liquidator, have been the main cause of the delay in this particular case. Pioneer Investment was also awarded a global equities mandate by Afore Sura totaling US$700mn, for which BlackRock, Investec AM, and Morgan Stanley Investment Management were also selected.