ERAFP plans €50m low carbon equity fund investments
France’s €27bn civil service pension scheme is planning to invest €50m between now and the end of the year in international equity funds aimed at combating climate change.
In selecting the funds, ERAFP said it used a virtual asset management platform it helped create in November 2015.
The platform was the outcome of a partnership with Cedrus Asset Management and amLeague, an active management index performance and data provider. Managers can use it to demonstrate their performance on a notional low-carbon international equities mandate.
“Now that it has more than one year of performance history (financial and non-financial) with which to compare the portfolios put forward by this platform, ERAFP has decided to add to its purchase list funds using the best strategies of the amLeague platform,” the pension scheme said.
A spokeswoman told IPE that ERAFP selected two funds based on the amLeague platform. Not all strategies applied on the platform were available in the form of UCITS funds, she added.
Its first investments, for around €10m, have been made in an “Inflection Point Zero Carbon” fund from asset manager La Française.
ERAFP also selected four funds taking a more thematic approach to combating climate change, focusing on companies that offer products or services that could help cut carbon emissions. These were not identified via the amLeague platform.
The La Française Inflection Point Zero Carbon fund seeks to invest in companies “delivering solutions to the climate change challenge,” according to a fund document. It has a five-year investment horizon, and aims to outperform the MSCI All Country World index over that time frame.
The fund was created in June 2015. Its Euro-denominated ‘S’ share class for institutional investors has so far underperformed its benchmark by more than 10 percentage points, according to an April factsheet.
The announcement of ERAFP’s plans for further low carbon investments comes shortly after the scheme launched a €200m real estate tender, as reported by IPE Real Estate.