Mandate roundup: FRR, ERAFP, Nutreco, SPT
France’s €36.3bn pension reserve fund, Fonds de réserve pour les retraites (FRR), has awarded up to €5bn in mandates for ESG-strengthened passive equities management.
The pension fund last week announced that it had selected Amundi Asset Management, Candriam Luxembourg, and Robeco Institutional Asset Management.
The mandates were tendered in September 2015 to renew existing contracts for passive equity management, with FRR wanting managers to more strongly reflect the development of its responsible investment strategy and topical environmental, social, and governance (ESG) issues.
The mandates effectively cover FRR’s entire passive equity portfolio, the bulk of which is in smart beta indices.
The asset managers are charged with running the pension funds’ index-tracking investments through ESG processes. This means continuing with the implementation of FRR’s decarbonisation strategy and other aspects of its responsible investment policy, but also applying new policies, such as excluding tobacco and certain coal assets.
FRR had already been implementing a low carbon approach for its passive equity holdings, having committed to an MSCI Europe low-carbon index strategy developed with Amundi.
Anne-Marie Jourdan, head of communications and legal affairs at FRR, told IPE that its previous passive equity management mandates were for investments tracking “optimised” indices, but these did not systematically involve ESG processes.
“These mandates have a proper ESG stamp – they have to implement decarbonisation, exclusion, or other ESG policies,” she said. “We’re really asking the managers to pay attention to all ESG aspects.
“The mandates were coming up for renewal and even though our index investments were already decarbonised we wanted to strengthen the ESG dimension even more.”
At the end of December 2015, just shy of 41% of FRR’s equity investments were passively managed.
Elsewhere in France, ERAFP, the €26bn pension fund for civil servants, has chosen five climate change research providers and consultancies for mandates it put out to tender in October 2016.
The pension fund has hired Trucost, I Care & Consult, Grizzly Responsible Investment, and Beyond Ratings to measure ERAFP’s equity and bond portfolios’ exposure to “climate change-related risks and opportunities”. Carbone 4 has been engaged to provide “assistance with the design of a methodology to measure, analyse, and evaluate exposure to climate change related challenges in the real estate, infrastructure and private equity portfolios”.
The companies’ work will help ERAFP to “continue to better understand the environmental issues of its portfolio and define its carbon strategy”, the pension fund said.
In Italy, the newly consolidated defined contribution (DC) pension scheme for employees of the Intesa Sanpaolo banking group is seeking 13 managers for asset management mandates worth roughly €3.4bn.
The scheme is the result of a recent merger of several smaller schemes for employees of the group’s subsidiaries. In September last year, the scheme’s board decided to divide it into five funds, known as “comparti”. There are two fixed income funds, each with different time horizons, two balanced funds with different risk profiles, and an equity fund.
The scheme is seeking to award a total of 24 mandates. Managers have until midday on 17 February to respond. Further information on the mandates, including benchmarks and various requirements, can be found on www.mefop.it.
Meanwhile, Fondo Byblos, Italy’s DC pension scheme for the paper and publishing industries, is seeking requests for proposals (RFPs) from managers of private debt funds.
The scheme, which had €721m of assets at the end of 2015, plans to invest €30m in the asset class. Byblos is seeking one or more AIFMD-compliant funds of at least €150m to invest in corporate private debt, infrastructure debt and real estate debt. Funds investing in distressed debt and non-performing loans will not be considered.
The €30m private debt allocation will be placed within the “bilanciato” (balanced) fund, which is the largest of Byblos three-fund structure. The two other funds within Byblos are “garantito” (guaranteed) and “dinamico” (dynamic).
Interested managers have until midday on 28 February to submit RFPs. Further information on how to submit proposals is available on www.fondobyblos.it.
In the Netherlands, animal feed company Nutreco has outsourced the future pension accrual for 750 employees to Nationale-Nederlanden.
The contract involves an insured defined benefit (DB) plan as well as defined contribution arrangements any contributions above Nutreco’s DB ceiling.
Nutreco said the switch was in line with pension arrangements of parent company SHV, which had already placed pensions accrual with Nationale-Nederlanden. Nutreco’s pension scheme was implemented by Aegon after the firm liquidated its original pension fund in 2011.
The company stressed that the new contract involved future accrual and that no assets would be transferred. Nutreco has 1,600 employees in total, most of whom are participants in industry-wide pension funds.
SPT, the €153m pension fund of Dutch panelling manufacturer Trespa, appointed BMO Global Asset Management – formerly F&C – as its fund manager.
BMO replaced Delta Lloyd, as new legislation prevented the pension fund from extending its contract, SPT said. The asset manager’s relationship with SPT began in 2002.
However, SPT is to keep its stake in Delta Lloyd’s Institutional Global Equity fund, “as the fund represented the correct implementation of the scheme’s investment strategy”.
SPT had already announced that it would outsource its administration and annual reporting to consultancy Aon Hewitt. SPT has approximately 1,000 participants and pensioners in total.