Asset management roundup: ERAFP awards €2bn currency mandate
French public sector pension fund ERAFP has awarded a currency mandate worth roughly €2bn to Millennium Global Investments.
BNP Paribas Asset Management and Russell Investments were named as back-up managers for the mandate to hedge foreign exchange risk linked to ERAFP’s €30bn portfolio.
“The strategy implemented will include both a passive component and a dynamic component of foreign exchange risk hedging,” the pension fund said in a statement.
Millennium Global was selected in particular for the “robustness” of its management process, ERAFP added.
The mandate is initially for four years, with the option for ERAFP to extend for two successive two-year periods.
Millennium Global said the mandate meant it had grown its assets under management by 50% since the start of 2017. The currency specialist runs $21bn (€17bn).
BlackRock, JP Morgan collaborate on ESG bond indices
JP Morgan has launched a range of global fixed income indices designed to tap into the growing demand from bond investors for environmental, social and governance (ESG) considerations when investing in emerging markets.
The JP Morgan ESG index, conceived in conjunction with BlackRock, the world’s largest asset manager, covers more than 170 countries with over 650 issuers analysed on a daily basis.
“Responsible investing is becoming the cornerstone of many of our clients’ strategies and having access to a proper global fixed income benchmark that integrates ESG is essential,” said Gloria Kim, head of the global index research group at JP Morgan.
Sergio Trigo Paz, head of BlackRock’s emerging market debt (EMD) team, said that strong ESG practices worked in favour of creditworthiness over the long term. He added: “Up until now, ESG in emerging market debt has been more bespoke and project-based, as opposed to providing solutions at scale.
“Establishing these benchmarks will be instrumental in redefining the investment universe and setting an industry standard to help make ESG investment within EMD more broadly accessible to all investor types.”
The index applies an ethical screen to thermal coal, tobacco and weapons, as well taking account of the United Nations Global Company principles.
Amundi launches European leveraged loan fund
Amundi – Europe’s largest asset manager with €1.4trn under management – is to launch a European leveraged loan fund aimed at institutional investors.
Amundi Leveraged Loans Europe 2018 will be structured as a sub-fund of the firm’s Luxembourg-domiciled Sicav and will invest in senior secured leveraged loans that have been issued to finance leveraged buy-outs or larger acquisitions.
Thierry de Vergnes, head of acquisition debt funds at Amundi, said: “We invest in both the primary and secondary markets with the aim of taking advantage of market opportunities, and we also seek diversification across both sectors and geographic regions in the portfolio.
“The objective of this active, diversified management is to generate regular returns with low volatility.”
Amundi said the portfolio of leveraged loans would invest mostly in issuance from private equity-owned European companies with a target return of 4% above Euribor until the fund matures in 6-8 years’ time.
The asset manager runs €5bn in its private debt team and €3bn in its leveraged loans team.