Environment Agency axes SWIP from emerging markets mandate

The £1.4bn (€1.6bn) Active Pension Fund of the UK’s Environment Agency has axed Scottish Widows Investment Partnership from an emerging market equities mandate following the departure of its team to rival Martin Currie.
Howard Pearce, the agency’s head of pension fund management, told RI that the fund is now looking to replace SWIP. The agency plans to allocate between £50m-£150m to one or several EM managers with good environmental, social and governance (ESG) credentials to deliver +3% performance.
Martin Currie recently hired six from SWIP, Andrew Ness, Jeff Casson, Divya Mathur, Mohammed Zaidi, Kim Catechis and Alastair Reynolds, as it looks to build its presence in the sector.
The fund prefers positive equity selection usingfinancial and sustainable criteria rather than negative screening.
Managers should be a member of, or be willing to participate in, the UN Principles for Responsible Investment and support other global initiatives such as UN Environmental Programme – Finance Institutions (UNEP – FI) and/ or the UN Global Compact.
The fund is also still evaluating tenders for a global bond mandate integrating ESG factors following the termination of European Credit Management last year and hopes to appoint by October.
Speaking at the Clean Investor event in London yesterday, Pearce said the fund aims to have around 25% of its assets in environmental funds by 2015, up from around 13% (£205m) currently.