We currently work with more than 30 investment and asset managers around the world. These investment managers have discretion to make investment decisions on our behalf, subject to an Investment Management Agreement with the Guardians or the terms of the collective investment vehicle that we have agreed to invest in.

At any given time we are also talking with incumbent and prospective managers about various investment opportunities. These relationships can generate new investments. They also provide us with valuable information and knowledge across a range of investment and operational topics.

Before appointing an investment manager, however, we have a strong focus on understanding and gaining confidence in the underlying investment opportunity and what's driving it.

Where we think an external manager is the best way of accessing that opportunity, we undertake a formal selection process that aims to find the best manager available globally.  We talk to a number of possible managers and look at each one's match with the specific investment opportunity, their strategy, organisational capabilities and their overall fit with our long-term objectives, commitment to responsible investment and investment style.

We evaluate external investment managers in two ways:

1. 'Conviction' - our confidence in the manager's competence to execute an investment opportunity and the general quality and 'fit' of the organisation
2. Operational Due Diligence - the manager's regulatory, operational, organisational and financial processes and procedures.

Each evaluation is done by separate teams with different reporting lines.

If a manager does not pass the Operational Due Diligence review, we do not invest.  Once invested, if we have operational concerns, we act on them immediately (including termination if appropriate).

The conviction process

Our conviction process is a structured way of assessing the manager's competence to execute the investment opportunity on our behalf.  Key inputs include the manager's performance, their overall conduct and the extent to which they are meeting any knowledge transfer expectations that we have of them.  The management of ESG factors is also a key element. Conviction reviews are undertaken at least annually.

Relationship management

We have a structured approach to relationship management, segmenting our managers into priority tiers. We aim to have deeper relationships with managers we consider are of strategic, long-term value to the Fund. Our aim is to have fewer, deeper manager relationships.