French mutual insurer hires three managers for first RI bond fund seeded with €175m

Fund has scope for engagement with bond issuers on ESG issues.

AG2R La Mondiale, the French mutual insurance group, is launching its first responsible investment (RI) Euro fixed income fund to third party clients, notably France’s ‘institutions de retraite’, the funds of the country’s pay-as-you-go (PAYG) retirement system. It has seeded the new fund with €175m from an existing bond fund. AG2R, which covers some 8 million policy holders, already manages almost €1bn on a best-in-class RI approach in equities, making it one of the largest responsible investors in France.
The insurer has hired BNP Paribas Asset Management (government bonds), Standard Life Investments (credits)and Groupama Asset Management (aggregate bonds) to run three ESG-based fixed-income segments within the new fund, following a manager selection process run by Mercer, the investment consultant. AG2R’s in-house fund manager, Agicam, already runs about €14bn for French PAYG retirement funds and employee savings plans, and it will monitor asset allocation and overall risk of the three bond strategies.
AG2R said the new fund would also include scope for dialogue and engagement with underlying debt issuers on ESG issues. The fund is expected to be approved soon by AMF, the French regulator.