French civil service pension fund ERAFP is calling for applications to manage €1.2bn worth of “SRI credit bond” portfolios.
The €30bn scheme, which had 49.8% of its assets in bonds at the end of 2020, is re-tendering two mandates, largely invested in USD-denominated corporate bonds from issuers in OECD countries. A further two ‘stand-by’ mandates will also be awarded, which ERAFP could activate “notably with a view to diversifying risk”, the pension fund said.
The mandates will last for six years with an optional two-year extension. The current manager for the active mandate is AXA Investment Management, while the ‘stand-in’ contracts are with Natixis, Loomis Sayles, CCR Capital and UBS.
Managers must comply with the ERAFP’s SRI requirements, and integrate ESG scores into holding analysis. ERAFP does not use sector-based exclusions, opting instead to positively screen for best-in-class companies, using criteria such as how issuers respect trade unions, positive environmental impact, and prevention of corruption and money laundering.
Applications are open until December 10. Documentation is only available in French.
In mid-October, the fund published its interim 2025 decarbonisation targets as part of its commitments under the Net Zero Asset Owner Alliance. It plans to slash the scope 1 and 2 carbon intensity of its equity and corporate bond portfolios by a quarter by 2024, and align its entire non-residential real estate portfolio with a 1.5°C scenario. It also plans to engage with the 30 most carbon intensive issuers in its portfolio, through its asset managers and collaborative initiatives such as Climate Action 100+.