ERAFP – France’s €26bn public service additional pension scheme and a dedicated SRI investor – has awarded some €350m in private equity and infrastructure mandates.
It will invest approximately €200m in a segregated fund run by Access Capital Partners, in a new 10-year mandate. The fund will invest primarily in unlisted European mid-market companies through growth capital or buyout transactions. It may also finance mezzanine or unitranche loans “to a lesser degree”, ERAFP said. It will make the investments through primary or secondary funds, mainly, it added.
Access Capital is a Paris-based firm with offices in Brussels, London and Helsinki and focuses exclusively on European opportunities. According to its website, it manages or advises €7.5bn from more than 200 institutional and retail investors. It is a signatory of the Principles for Responsible Investment.
At the same time, ERAFP announced that Ardian France, an asset manager with some $60bn under management, will take on a 10-year, €150m infrastructure mandate. “ERAFP wishes to use this mandate to invest in contractors whose purpose is notably to finance, build, restructure, operate or operationally manage vital public infrastructures,” it said. The assets will be unlisted, and will be a combination of greenfield and brownfield sites based in EU countries.
Ardian claims to integrate environmental, social and governance criteria into its entire investment process, “translating into a mainstream approach of responsible investment”. It screens out “unethical” sectors such as firearms and tobacco.The two mandates were awarded following a tender process launched in January last year. ERAFP said the decisions were “part of its policy of expanding its investment universe and in accordance with its SRI approach”. In October it launched another tender to find consultancies specialising in environmental risk. In December it updated its SRI charter, citing “more urgent” challenges and claiming that companies failing to engage adequately would risk exclusion from its portfolio.
Meanwhile, fellow French pension fund, the Fonds de réserve pour les Retraites (FRR), has announced it is seeking a company to carbon footprint its portfolio. Following the 2015 launch of France’s Article 173, which requires investors and companies to report on climate-related performance, and FRR’s revised ESG policy in December, which includes commitments to exclude companies significantly involved in thermal coal extraction or coal-fired power generation – both of which come into practice this year – FRR wants to hire a company “to identify the risks arising from climate change to which the FRR is exposed through the financial assets held in its portfolios”. The fund, which is a signatory of both the Montreal Pledge and the Portfolio Decarbonisation Coalition, said: “This footprint should enable the FRR to identify assets with a heavy carbon footprint, those generating physical risks and energy and ecological transition, while respecting the international objective of limiting global warming.” Deadline for applications is Monday 30 January, and a two-year contract is expected to be awarded as a result.