NEST, the defined contribution master trust set up by the UK government, has awarded a mandate to Amundi for it to provide the scheme with access to derivative contracts.
The mandate is to help make the managing of NEST’s portfolio more efficient by enabling the use of derivatives contracts to rebalance the scheme’s portfolio to target exposures in specific circumstances.
Another objective is to reduce drag on performance by equitising cash set aside for private market deployment.
Anders Lundgren, head of public markets and real estate at NEST, said derivates are “a great solution” for quickly rebalancing portfolios when markets are volatile, as was the case during the coronavirus pandemic.
“This mandate can also put any capital we have saved up for our private market investments to good use,” he added. “We want to avoid any drag on performance and keep our members’ money busy to help boost their pension pots.”
Lundgren said NEST was not committing to deploy a fixed amount of money to the Amundi mandate and that the pension scheme would use derivatives in specific circumstances, “helping us to continue building a sophisticated investment strategy for all seasons”.
Amundi is already NEST’s active emerging market debt portfolio and also runs a private credit mandate for the scheme.
GSAM lands fiduciary management mandates
Goldman Sachs Asset Management (GSAM) has been appointed to provide fiduciary management services to two UK pension schemes within the Short Brothers Common Investment Fund with assets totalling £1.6bn (€1.9bn).
The trustees chose GSAM after a competitive tender process supported by PwC. The asset manager will implement a diversified investment strategy with bespoke hedging requirements to meet the fund’s unique long-term objectives, with a focus on increasing the probability of securing members’ benefits.
Ken Brundle, chair of the Common Investment Fund, said the trustees felt GSAM offered a solution that was tailored to the specific needs of the fund and flexible enough to meet those unique requirements.
“In selecting Goldman Sachs Asset Manager as our partner, we were impressed with the company’s track record and deeply resourced investment teams, which assured us that they have the expertise to help us achieve our investment objectives,” he said.
Keira-Marie Ramnath, lead pension asset outsourcing adviser at PwC, said: “This marks another significant deal for the fiduciary management market, having had several bespoke elements.”
GSAM recently acquired NN Investment Partners, having indicated it plans to use the acquisition to reposition itself in European fiduciary management.
FRR awards transition mandates
Fonds de reserve pour les retraite (FRR) has selected BlackRock and Russell Investments as preferred transition management partners.
Each of the mandates will run for four years with the possibility of being renewed for a further year.
Separately, the €26bn French pension reserve fund has been on the look-out for up to two law firms, which it will also hire for four years with a possible renewal once for one year. The deadline for applications was yesterday, 9 May.