€8bn Ircantec adds to mandate tenders with three European equity portfolios worth €300m

Ircantec, the €8bn French public pension scheme – a notable responsible investor – is tendering for three European equities lots worth a total of €300m across three different active share strategies: minimum volatility, active systematic investment, and smart beta.
The tender comes just a month after Responsible Investor reported that Ircantec had come to market for up to four investment grade corporate debt mandates denominated in euros, also worth a total of €300m based on clear responsible investment criteria.
Ircantec – or to give it its full name in French: L’institution de Retraite Complémentaire des Agents Non Titulaires de l’État et des Collectivités publiques – is a French pay-as-you-go second pillar pension structure created in 1970. It covers state employees, and regional authority workers, including local politicians, and staff at companies such as EdF and GdF, the big French utilities, and the Banque de France.
Its €8bn treasury is its contributions buffer for future pension payments.
For the first portion of the new tender: a €100m minimum volatility strategy, Ircantec says it is looking for a quant, systematic equities selection process within a strict risk budget, but which looks to take bets against a benchmark – either the MSCI Europe index or an equivalent.
The second tranche is another €100m in European equities with Ircantec looking for the manager to focus on an active, systematic process that maximises the Sharpe Ratio of the portfolio for risk-adjusted performance, again against the MSCI Europe or equivalent benchmark.
The third mandate is another €100m in a smart beta mandate.
The scheme says it will reserve the right to reduce the allocations for strategic reasons if necessary.
Ircantec uses France’s Caisse des Dépôts et Consignations (CDC), the French quasi treasury, sovereign wealth fund, as an investment advisor and mandate tender consultant.Ircantec became a signatory to the United Nations-supported Principles for Responsible Investment this year, but its RI activities go back several years.
In June 2012, RI reported that Ircantec had awarded a series of environmental, social and governance (ESG) mandates to a total of seven asset management firms in 10 different mandates. In October 2013, the fund published a responsible investment charter based on three main pillars: a full reflection of the long-term interest of its beneficiaries, a belief that ESG factors can influence investment returns to varying degrees across asset classes and sectors, and a desire to ensure that the fund is in step with the major sustainable growth objectives of society.
 The other major aims of its charter alongside active engagement is to integrate ESG into portfolio decisions. It carries out corporate exclusions based on international norms, but its priority in equities is ‘best-in-class’ selection of companies that favour social progress, environmental protection, sustainable development and good governance. In government bonds, Ircantec says it favours states that promote health and education, environmental protection, biodiversity, anti-corruption, the adoption of international treaties and freedom of expression. For real estate, it said its RI policy focuses on investing in socially orientated property such as medical establishments, retirement homes, student accommodation and contracts for building improvement around environmental performance and tenant welfare.
 On shareholder engagement, the fund votes its shares with a focus on issues of executive pay, shareholder rights, accounts and management audits and treasury management. 
Ircantec recently allied itself to the Global Investor Statement on Climate Change put out at September 2014’s UN Climate Summit in New York, which was signed by 350 institutional investors worth $24trn and called for carbon pricing, an end to fossil fuel subsidies and further research on low carbon investment strategies.
Responses to the tender have to be in French and submitted by January 7 2015 to roselyne.leclerc@caissedesdepots.fr