France’s FRR re-tenders €600m in ESG mandates

The €33bn French Pensions Reserve Fund (FRR) is retendering for up to €600m in sustainability themed investment mandates after the original SRI mandates awarded in 2006 have come up for review. The fund, one of Europe’s largest responsible investors says it will award mandates in two sustainability themed lots: one for ESG themed sustainability mutual funds and another for sustainable European equities growth strategies. The fund said it could award one or more portfolio briefs in either category and that selected managers would have to have an existing or planned ESG strategy for asset management. The new mandates will replace €600m in pure SRI briefs handed to five fund managers in 2006: Dexia Asset Management, Allianz Global Investors, Morley Fund Management, Pictet Asset Management and Sarasin Expertise Asset Management.

Dexia was fired last year from its European SRI equities mandate – which was likely to have exceeded €100m – as a result of poor performance. The assets were shared amongst the other four SRI managers: Allianz Global Investors, Morley Fund Management, Pictet Asset Management and Sarasin Expertise Asset Management.
 Fund managers have until January 23, 2012, to pitch for the business and the relevant documentation can be found Here. re-tendering of the ESG mandates retains the FRR’s commitment to responsible investment despite it starting the long wind-down to repay its assets back to the French social security system. The FRR this year began paying about €2bn per annum into CADES (Caisse d’Amortissement de la Dette Sociale), the state agency charged with funding France’s social security debt, nine years earlier than planned. FRR will no longer receive any asset inflows from the state. At that rate the fund will be fully wound up by 2024. The fund had originally only been scheduled to start paying down its assets in 2020.
The FRR is a founding signatory of the UN Principles on Responsible Investment (UNPRI), but this year lost two of its leading RI professionals.
Antoine de Salins, former executive director at FRR and a previous board member at the UNPRI left to join Groupama Asset Management as Chief Investment Officer.

And Nada Villermain-Lécolier, former Head of Responsible Investment (RI), joined France’s Caisse des dépôts (CDC), the long-term investment group, that manages part of the country’s treasury.