France’s €32.65bn Fonds de Réserve pour les Retraites (FRR), the French public pensions buffer fund, has awarded small caps mandates worth a total of €1.7bn to eight fund managers that could demonstrate strong ESG integration alongside their investment capabilities.
The mandates were put out to tender in two buckets.
The first, for European small caps, was valued at €1.1bn and split between four fund managers: AXA Investment Managers, BNP Paribas Asset Management, Fil gestion, the Paris-based operations of Fidelity International, and JP Morgan Asset Management.
FRR said it paid particular attention to the integration of ESG issues in investment management processes
The second bucket for French small caps has a total value of €600m and is split between Amiral gestion – the French and European SME specialist – BFT Investment Managers, HSBC Asset Management and Sycomore Asset Management.
FRR said it had paid particular attention in the manager hires to the integration of ESG issues in their investment management processes.
The amounts awarded to each manager are not disclosed. FRR does not use a consultant for manager selection.The mandates are for four years each, with the possibility of being renewed once for a further year.
RI has reported that FRR has a number of other tenders out in the market at the moment.
They include a tender for the active management of up to four mandates for all-cap Japanese equities portfolios.
The mandates have an estimated total value of €600m.
It also has a search outstanding for a €500-600m global equity impact investing mandate which is expected to be finalised after the summer.
RI reported last week that FRR wants to align its portfolio with a 2°, or even 1.5° trajectory, according to a new four-pillar responsible investment strategy.
Notably, FRR says it will conduct an “in-depth analysis” of the SDGs in order to align its management with the goals that are most relevant to its values and fiduciary responsibility.
It will also extend “responsibility requirements in investing”, meaning the integration of ESG in all investment processes, impact assessment, the “systematization of reporting” and other factors.
FRR is a public administrative fund of the French state created by law in 2001. Governed by a Supervisory Board and Executive Board, its mission is to manage the funds allocated to it until 31 December 2010 in order to build up reserves to contribute to the long-term sustainability of the old-age pension system.