Governance

Environment Agency backs Generation’s new global credit fund amid raft of appointments

Mandates also go to Robeco, First State, PIMCO and others

-

The Environment Agency Pension Fund has committed £15m (€17.3m) to Generation Investment Management’s new sustainable global credit fund as part of a wider set of manager appointments – and terminations.

Asset managers appointed include Robeco, Germany-based Quoniam, First State, PIMCO, Royal London Asset Management (RLAM) and RobecoSAM.

The fund has dis-invested assets from fund giant Legal & General and currency specialist Informed Portfolio Management (IPM) to fund the appointments.

The award to the new Generation credit fund builds on the fund’s existing £140m global sustainable equities brief with the London-based boutique that was co-founded by former US Vice President Al Gore.

The agency has put £85m each into two segregated low volatility environmental, social and governance (ESG) mandates with Robeco and Quoniam, believed to be the latter’s first mandate in the UK.
The Robeco win is the first announced since its acquisition by Japan-based ORIX in a €1.9bn deal last month.

These mandates were funded by dis-investment from anL&G passive equity fund, said EAPF Head Howard Pearce.
The EAPF has also invested £55m in the First State Global Emerging Markets Sustainability fund, funded via the termination of its active currency brief with IPM.

On the fixed income side, the fund has invested £100m in the PIMCO unconstrained global bonds fund and a further £50m with Royal London, which uses research firm EIRIS for ESG screening. It takes the fund’s assets with RLAM to around £180m.

These moves were funded by dis-investment from an L&G passive corporate bond fund, UK government bonds (gilts) and cash.

The EAPF has also topped up its ESG-screened £130m fund of fund private equity commitments with RobecoSAM by £10m.
All the managers hired are signatories to the UN Principles for Responsible Investment and the fund was advised by Mercer and bfinance.
The EAPF is currently at the short-list stage for a £245m real asset mandate comprising property, infrastructure and forestry/farmland and hopes to appoint shortly.