FRANCE - Fonds de Reserves pour les Retraites (FRR), the French national pension fund, has managed to claw back some of the investment losses it suffered last year, ahead of changes to its strategic asset allocation.

The pension fund saw a reverse in fortune during the second quarter of this year, "mostly attributable to the strong rebound in equity markets observed since the second half of March", said officials, as net performance hit 10.5% in the three months to the end of June.

The reserve fund is currently back in positive territory and has now generated a 0.9% return since its inception in 2004, as the fund lost 6.5% in the first three months of 2009 but was left with a 3.3% gain for the first half of this year.

FRR's assets have now grown from €27.7bn at the end of 20087 to €28.8bn within six months.

Plans to reform the asset allocation are also making progress - as adopted from 18 June - said the fund, as approximately 48% of assets are held in ‘performance assets' such as equities, real estate and commodities while 52% is managed in fixed income and cash, awaiting investment.

Officials announced in June that the asset allocation review had been concluded and the new allocation would eventually be split as 45% equities, 25% fixed-rate bonds, 20% index-linked bonds, 5% real estate and 5% commodities, although there would be some flexibility allowing ‘performance assets' to be worth between 40-60%. (See earlier IPE story: FRR lowers equity holding in strategic review)

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