French pension fund IRCANTEC awards range of ESG mandates
FRANCE - The €5.9bn French public pension fund IRCANTEC has awarded a number of mandates as part of plans to roll out a new strategy embracing environmental, social and governance (ESG) criteria.
The pension fund first tendered the mandates - 10 in total - in December 2010.
The first awarded cover two equity mandates of €500m each, won by Allianz Global Investors and Edmond de Rothschild.
The second comprises three corporate bond mandates worth €800m each, awarded to Amundi, Dexia and Natixis.
The third includes three mandates of diversified assets of €700m each, awarded to Allianz GI, BNP Paribas Asset Management and CPR.
And the fourth - two mandates of €400m each for inflation-linked bonds - was awarded to BNP Paribas and Natixis.
IRCANTEC's board agreed to change the fund's asset allocation last year, scaling back investment in sovereign debt to 46% of the portfolio, whilst increasing investments in index-linked bonds to 20% and equities to 29%.
In a previous interview with IPE, vice-president Jean-Paul Thivolie and CIO Edit Jousseaume said the fund now aimed to launch a new tender process for its sovereign debt pot.
According to Jousseaume, however, a number of challenges associated with ESG have seen the tendering process postponed to the second half of this year.
"It remains difficult to evaluate ESG criteria for sovereign bonds," she said. "While we can judge corporates on their social and environmental behaviour, the approach taken by governments immediately becomes a broader problem."
The fund's board of directors is nonetheless addressing this issue and hopes to find an appropriate solution in the coming months.
"The introduction of the ESG criteria for sovereign debt will be done this year," Jousseaume added.