France’s Fonds de reserve pour les retraites (FRR) secured returns of 9.68% in 2023 after costs, with the public investor saying a strengthened allocation to return-seeking assets had come into its own from the second half of the year.

The fund has also announced that chief investmetn officer Salwa Boussoukaya-Nasr has been appointed to the executive board, replacing Olivier Rousseau. Boussoukaya-Nasr’s replacement has not yet been decided, IPE understands.

FRR’s 2023 result takes the fund’s annualised returns to a net 3.9% since January 2011, when it embarked on a fully-fledged liability-driven investment approach in the wake of the 2010 French pension reform.

Assets have grown 112.8% since the end of 2010, with the funding ratio standing at 21.8%.

Caisse des Depots, FRR headquarters, Paris

Caisse des Depots, FRR’s headquarters, in Paris

In 2022, FRR increased its strategic allocation to performance-seeking assets by 10 percentage points, to 70%. It stuck to this in 2023, albeit shifting five points in favour of high yield bonds, away from equities.

It said the higher allocation to return-seeking assets had greatly benefited the fund’s financial performance in the second half of the year.

Overall, FRR’s assets under management were largely unchanged at the end of 2023, with the regular €2.1bn payment to CADES, a fund established in 1996 to assume and redeem past social security debt, largely using up the €2bn gain. FRR has now returned more than all of its endowments.

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