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Tender for management of European small/mid cap equities

This document gives a description of the procurement process and some general information on the mandate(s). To download the official CONTRACT NOTICE published in “Publication of Supplement to the Official Journal of the European Communities” please see below at the end of this document.

The application should be in the form of a letter describing how the manager fulfils the conditions for participation as set out in the official contract notice under item 12.

The applications should be sent by e-mail to european.smid@ap3.seon or before the 25/11/2002, followed immediately by one identical hard copy by mail/messenger with the envelope marked ”European small & mid cap AP3 2002/104” to one of the following addresses:

For mail: Tredje AP-fonden, Att. Lena Djurberg, P.O. Box 1176, SE-111 91 Stockholm, Sweden

For messenger: Tredje AP-fonden, Att. Lena Djurberg, Vasagatan 11, 8th floor, Stockholm, Sweden.

Questions of a general nature and AP3’s answers will be posted on AP3’s website (


Information about the procurement

The process
AP3 plan to form closer relationships with a small universe of managers, most likely in the range of 5 to 10, with whom Investment Management Agreements will be signed. Out of this universe a selected number of managers will be funded.

Since AP3 is a government authority we will adhere to a formal public procurement process when hiring external managers. The process is divided into three steps:

In the first step all interested managers are welcome to answer the questions in the official contract notice, which is published in “Publication of Supplement to the Official Journal of the European Communities” To download the official contract notice please see below at the end of this document. It is important that the answers are substantiated with relevant information.

The second step will be that, based on the answers received, the managers who fulfil the requirements in the official contract notice1) and are among the 25 managers with the highest information ratio, given the minimum tracking error level (see Item 6 in the contract notice), will receive a questionnaire (RFP).

As the third step, based on the RFP’s, a limited number of managers will be selected for on-site visits to give a presentation of their capabilities in the relevant area. Following the on-site visits a limited number of managers will be invited to contract negotiations.

Provisional timetable (this may be subject to changes)
October 17 – Announcement to be placed with TED
November 25 – Deadline for applications
January 14, 2003 – Questionnaires (RFPs) to be distributed to managers
February 28, 2003 – Deadline for receipt of questionnaires (RFPs)

After this the evaluation phase begins. This will include on-site visits and potentially presentations by the managers at AP3. All which are planned to take place in the spring 2003.

Information about the mandate(s)
Below please find some general information that is eligible for this active European small/mid cap equity mandate(s).

  • The portfolio allocated is expected to be in the range of EUR 200 – 450 million. This will be divided between one or more managers.
  • Most likely the HSBC Smaller European Companies Index or Salomon Smith Barney Extended Market Index (EMI) or any of the CapRange series thereof will be used.
  • The base currency for the mandate(s) will be EUR.
  • The mandate(s) should preferably be managed on a segregated basis.
  • The performance and tracking error objectives will be set in consultation with the successful candidate(s). The tracking error limit is, however, expected to be at least 4%.
  • AP3 has appointed The Northern Trust Company as its global custodian. The global custodian will handle all custody matters, including stock lending.
  • AP3 will require reporting of daily net asset values at least on a weekly basis as well as regular monthly and quarterly reporting.
  • AP3 will require the Investment Management Agreement to be governed by and construed in accordance with English law. A standard agreement will be distributed together with the RFP.

1) Other general requirements
Any service provider may be excluded from participation in a contract who:

  • Is bankrupt or is being wound up, whose affairs are being administered by the court who has entered into an agreement with creditors, who has suspended business activities or who is in any analogous situation arising from a similar procedure under national laws and regulations;
  • Has been convicted or an offence concerning his professional conduct by a judgment which has the force of res judicata;
  • Has been guilty of grave professional misconduct proven by any means which the contracting authorities can justify;
  • Has not fulfilled obligations relating to the payment of social security contributions and taxes in accordance with the legal provisions of the country in which he is established or with those of Sweden; or
  • Is guilty of serious misrepresentation in supplying of failing to supply the information that may be required above.

Download the official CONTRACT NOTICE here >>