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France’s FRR preps return to US small caps

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France’s Fonds de réserve pour les retraites (FRR) is looking to return to active equity investing in US small caps after pulling out of the sector a few years ago.

The €34bn fund has launched a €2.3bn multi-part tender to renew growth and value style large and mid-cap mandates, but has also decided to include a search for US small-cap equity managers.

According to Anne-Marie Jourdan, chief legal officer and head of public relations at FRR, the fund stopped investing in US small cap stocks around 2010, due to poor performance.

The value and growth mandates that are up for grabs are for €900m each, while FRR also wants to allocate €500m to small-cap stocks.

In each case, Jourdan said, FRR has stated stronger requirements related to environmental, social and corporate governance (ESG) considerations.

According to FRR, applicants must take ESG aspects into account in their management processes, in particular by incorporating the fund’s exclusions policy – covering weapons, tobacco and coal – and voting and engagement policy. Applicants must also produce quantitative and qualitative reports illustrating the actions they have taken in this area.

For the growth style mandate the benchmark will be similar to the Russell 1000 Growth index. For the value mandate FRR will measure managers’ performance against an benchmark similar to the Russell 1000 Value index.

Each of the mandates will run for four years with the possibility of being renewed once for a further year.

The deadline for the application is 10 August.

Multi-asset fund manager wanted for tobacconists’ scheme

Separately, the French pension scheme for tobacconists is looking to appoint a multi-asset manager for its €474m portfolio.

Caisse de Dépôts et Consignation, which is the delegated manager of the scheme and carrying out the tender, has specified that the asset management must be “active and flexible”. The contract is for five years.

RAVGDT is the mandatory pension scheme for those who run “tabac” shops in France. Advertising themselves with a distinctive elongated diamond sign, les tabacs are licensed to sell tobacco products but also sell newspapers, stamps and other small items.

Financed on a pay-as-you-go basis, the scheme also holds reserves, comprising a securities portfolio of €474m as at the end of May.

Related images

  • Caisse des Depots, FRR headquarters, Paris

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