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IPE special report May 2018

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JP Morgan walks away from FRR mandate

JP Morgan Investment Management, one of the fund managers lined up by the e19.2bn French reserve fund for stand-by mandates, has withdrawn, thereby giving up the chance to run Euro-zone large-cap and US mid-cap equities.
The fund, the Fonds de Réserve pour les Retraites (FRR), said it would not re-award the two stand-by mandates.
A spokeswoman for the fund said: “This was a decision coming from JP Morgan and therefore the FRR will not make any comment. Of course we regret to see an asset manager go, but no other manager selected at the end of the selection process has done so.
“It is important for us to stress the fact that we have 27 active mandates and we are currently making investments. These operations are going very well.”
Last year the FRR funded 27 mandates and lined up 11 “stand-by” mandates to be funded in the future at a total of 20 asset managers.
The European large cap equity portfolio is currently run by AXA Investment Managers, Capital Internationa, Lombard Odier Darier Hentsch Asset Management and Groupama Asset Management. The indicative value of each mandate is e620m.
Société Générale Asset Management has been awarded the e200 mid-cap US portfolio but has in turn awarded the mandate to its US subsidiary, TCW.
The FRR spokeswoman explained the fund would “adjust” to the loss of JP Morgan without appointing new stand-by managers. JP Morgan declined to comment.

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