France’s ERAFP tenders €400m worth of SRI corporate bonds

€16bn Paris-based scheme looking to hire three managers with two placed on stand-by

ERAFP, the €16bn Paris-based French Public Service Additional Pension Scheme – a 100% SRI pension fund – is in the market to hire new managers for approximately €400m worth of SRI corporate bonds in US Dollar denominated mandates. The firm will hire three managers with two placed on stand-by for the assets.
ERAFP said the move into Dollar denominated bonds reflected a strategy to broaden its investment universe. The fund said it was seeking a non-benchmarked approach for the mandates, across broad sectors and with a strong accent on minimising default risk. It said managers would have to analyse each issuer in the portfolio based on its SRI policy, which is based on five fundamental values: respect of the right of law and human rights; social progress, social democracy, the environment; and proper governance and transparency.The mandate portfolios will principally be invested in the USD denominated bonds of corporate issuers located in an OECD country, with the exception of bonds issued or guaranteed by a sovereign state or a local authority. They will be hedged against foreign-exchange risk.
The initial term of the mandate is five years. ERAPF said it could extend the mandates for three successive periods of one year each. ERAFP is one of the largest public pension funds in the world in terms of members with nearly 4.5 million beneficiaries, 45,000 employers and close to €1.77bn in contributions each year. A mandatory, points-based pension scheme, since 1 January 2005 ERAFP manages the supplementary pension benefits for civil servants, local authorities and the public hospitals sector.
The tender documents can be found here.