France’s ERAFP names managers for €2.4bn SRI mandates

Crédit Agricole, Allianz Global Investors and State Street Global Advisors have won mandates worth hundreds of millions of euros each over three years in one of the biggest ever investment tenders to managers running money according to socially responsible criteria. ERAFP, the €6.5bn French fund for 4.6 million civil servants, which was created in 2005 and runs its entire portfolio according to SRI principles, said it had selected the three managers for a mix of global equity and credit briefs. Crédit Agricole Asset Management has been awarded the mandate to run an initial €250m euro denominated investment grade credit bonds, with the fund planning to add €250m each year for the next two years, giving Credit Agricole a potential €750m plus pot. Paris-based Groupama Asset Management has been put on stand-by for the mandate in the event that ERAFP terminates investment with Crédit Agricole. Allianz and State Street have each won portfolios of €150m to be trebled to €450m over three years for investments in global equities in developed countries. Axa Investment Managers hasbeen put on stand-by for the mandates. ERAFP said the investments would be for an initial three years with the potential to be renewed for a further three.
The money is being drawn from internally managed government bond portfolios, which made up 78% of the fund’s assets at the start of 2008. In 2007, ERAFP outsourced four euro equities mandates to BNP Paribas Asset Management, Robeco, IDEAM (part of Crédit Agricole Asset Management) and Pictet Asset Management. The fund has also said it plans to diversify into other asset classes on an SRI basis over time. The fund receives pension contributions of over €1.6bn each year.
ERAFP, which is a PRI signatory along with its €31bn French fund peer the Fonds de Reserve pour la Retraite (FRR), initiated an SRI charter in March 2006. This commits the fund to five principles in its investment in companies: respect of rule of law and human rights, social progress, employee representation, environment and good governance and transparency.