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NEST seeks suppliers for an Investment Advice Framework

02 August 2012

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NEST Corporation (NEST) has issued a tender revealing it is seeking suppliers for an Investment Advice Framework.

The framework is split into two separate lots, one for general investment advice and one for investment advice for search and selection of collective investment schemes (including but not limited to unit linked life funds) for the NEST scheme.

It is anticipated that the first lot will be awarded to one single supplier and the second one to a minimum of 3 suppliers.  For the latter NEST says individual mini-tender competitions will be run between suppliers  for each new search and selection of collective investment schemes. Depending on the responses received, NEST does however reserve the right to award the second lot to one supplier as well if this is proven to bring a better outcome.

Suppliers are encouraged to bid for both tenders if appropriate and NEST states that it reserves the right to select the same supplier for both.

NEST says the investment advice is required to call upon industry experts to advise and inform the executive, investment committee and trustee of NEST both on external matters and to comply with the following statutory requirements:

- Section 35 of the Pensions Act 1995 requires the trustees of occupational pension schemes to prepare and maintain a written SIP governing the decisions about investments for the purposes of the scheme.

- Section 2 of Occupational Pension Schemes (Investment) Regulations 2005 require that before a SIP is prepared or revised, the trustee must obtain and consider the written advice of a person who is reasonably believed by the trustee to be qualified by his ability in, and practical experience of, financial matters and to have the appropriate knowledge and experience of management of the investments of pension schemes.

- Section 36 of the Pensions Act 1995 requires that trustees seek FSA regulated advice to confirm that the investment and process undertaken to appointment the selected manager is satisfactory as described under the 1995 Pensions Act.


General Investment Advice

NEST Corporation wishes to appoint an investment advisor to provide general investment advice to NEST Corporation and trustees. The type of advice anticipated by NEST is as follows, but is not limited to:

- Advice relating to all statutory provision, guidance and regulations affecting the work of NEST Corporation, such as the impact of changes in legislation relating to investment matters,

- Advice relating to the design of our Statement of Investment Principles,

- Advice relating to the development and design of our investment strategy.

Due to the unpredictable nature of the work, it is not possible for NEST to give an accurate estimate of the investment advice requirement. However, NEST Corporation anticipates requiring between 10 – 100 days of investment advice per year. Please note that NEST cannot guarantee any volumes under this lot and the range of days is provided for guidance purposes only.

Investment advice for search and selection of collective investment schemes

NEST Corporation is seeking to set up a framework of Investment Advisors for search and selection of collective investment schemes (including but not limited to unit linked life funds) for the NEST Scheme.

Investments are likely to be pooled funds in the early years. On-going consideration will be given to the use of segregated mandates, until such a time as the trustees believe the assets are of optimum size to warrant the use of segregated mandates and that there are distinct advantages for the fund in doing so.

This second lot will be split into the following 3 requirements:

- To manage the search and selection of investment mandates on behalf of the NEST

- To carry out due diligence on the search and selection exercise managed by NEST for a new investment mandate and the recommended new investment mandate, in accordance with Section 36 of the Pensions Act 1995

- To provide ad-hoc investment advice to NEST to aid in preparing NEST's own manager search and selection exercises

To deliver the first of the 3 requirements for Lot 2, the Investment Advisor must be able to run a fully audited end to end procurement on behalf of NEST Corporation in line with the principles of the Public Contracts Regulations 2006. This will include but not be limited to:

- Advertising the requirement throughout Europe

- Drafting all tender documents such as a pre qualification questionnaire and an invitation to tender/request for proposal

- Evaluating responses and drafting/issuing Supplier feedback

- Leading on presentations

- Drafting any final contract documentation required

- Making recommendations and gaining approval from NEST at all stages of the search and selection

NEST Corporation anticipates running between 3-10 searches over the next 3 years. Please note that NEST cannot guarantee any searches and the range of searches provided is for guidance purposes only.

The framework agreement will be set up for a period of three years with an option to extend for up to a further twelve months, and is expected to cover all NEST's general investment advice and new search and selection of collective investment schemes requirements over that period. NEST says it does however reserve to right to use other suppliers' investment advice if desired.


First published 02.08.2012