The People’s Pension, which looks after £38bn (€43bn) in UK pension assets, has appointed Robeco to manage its £3.6bn emerging market equity portfolio.
The move represents an investment change from a passive approach to an active quantitative strategy for People’s Pension’s emerging markets portfolio, and achieves greater alignment with the pension fund’s evolving responsible investment policy.
The People’s Pension said the decision comes as a result of structural challenges observed in markets and indices in the region, and the strategy will allow the fund to set the necessary guardrails to ensure a long-term risk-controlled investment approach to generate good member outcomes.
Robeco’s appointment follows an “extensive research and due diligence process” run by the equity team at People’s Partnership, the provider of People’s Pension, where Robeco excelled in its commitment to investing in emerging markets and quantitative strategies.
The People’s Pension said that its thoughtful, forward-looking and risk-aware approach to portfolio construction, approach to partnership and industry-leading responsible investment integration “stood out”.
Robeco’s appointment comes nine months after the pension fund announced two new partnerships with Amundi and Invesco.
Amundi now manages £20bn in passive developed market equities, while Invesco took responsibility for more than £8bn in active fixed income investments.
“Our belief is that a selective active investment approach will lead to better returns for members”
Dan Mikulskis, CIO at People’s Partnership
This move saw State Street Investment Management, which was previously the sole manager of People’s Pension’s portfolio, left with around £5bn to manage.
Mark Condron, chair of The People’s Pension trustee board, said: “Forming strong partnerships – such as the one we are forging with Robeco – is central to our strategy. This development is consistent with our aim to deliver the very best returns to members with a best-in-class RI approach.”
Dan Mikulskis, chief investment officer at People’s Partnership, added that Robeco’s “cutting-edge” approach will enable the provider to maximise “the very best value from emerging markets”.
He said: “Our belief is that a selective active investment approach will lead to better returns for members. This is the latest step towards us achieving our goal of becoming a world-class asset owner.”
Weili Zhou, head of quant investing and research and deputy CIO at Robeco, said that People’s Pension’s solution will leverage Robeco’s quantitative investment expertise, combined with its proprietary sustainable investment frameworks and innovations.
She said: “We look forward to working closely with People’s Pension – a valued strategic partner – to deliver the best outcomes for their UK members.”
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