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France’s FRR issues request for responsible US value, growth and small-cap equities

Up to 12 mandates on offer in three lots

France’s €36bn Fonds de réserve pour les retraites (FRR), the country’s state pension reserve fund, has issued a request for proposals (RFP) for responsible active management mandates investing in US equities.

It follows an RFP in April tendering €1.7bn in domestic and European small-cap active equities.

The latest contract will comprise three lots, potentially comprising up to 12 mandates, although mandate size has not been disclosed.

  • Lot 1 is for a maximum of four actively managed (“Value” style) mandates seeking exposure to large and medium capitalization US equities. The benchmark will be the Russell 1000 Value Index.
  • Lot 2 is for a maximum of four actively managed (“Growth” style) mandates investing in large and medium capitalization US equities. Benchmark: Russell 1000 Value Index.
  • Lot 3 is for a maximum of four actively managed mandates seeking exposure to small capitalization US equities. Benchmark: Russell 2000.For each of the three lots, responsible active management means that applicants have to take ESG aspects into account in their management processes, in particular by incorporating the FRR’s exclusions policy (banned weapons, tobacco and coal) and voting and engagement policy.

And applicants must produce quantitative and qualitative reports illustrating the actions they have taken in this regard.

The FRR says it wants to underline its role as an “experienced long-term responsible investor serving and thereby increasing its impact on the real economy through these investments”.

Each of the mandates will run for four years with the possibility of being renewed once for a year. The deadline for replies is August 10.

Meanwhile, the FRR has appointed BlackRock and Russell Investments as transition managers, following a tender process begun in October last year.
It took the unusual step of saying that it was “very pleased with the number and quality of proposals received”.