France’s €8.5bn Ircantec hires Robeco, BFT and AGI for European equities mandates

Ircantec, the €8.5bn French public pension scheme, which has responsible investment principles as a significant part of its manager selection criteria, has hired Robeco Institutional Asset Management, Paris-based BFT Investment Managers (formerly BFT Gestion), and Allianz Global Investors (AGI), for three separate European equities mandates worth €100m each.
The equities briefs, all benchmarked against the MSCI Europe index or equivalent, have different strategies. Robeco, based in Rotterdam, will run its European shares portfolio via a minimum volatility approach. BFT, which is a subsidiary of Amundi, the French funds giant, and traditionally better known for fixed income investment, will run a systematic strategy that aims to maximise the Sharpe Ratio, the average return earned in excess of the risk-free rate per unit of volatility or total risk. BFT has an SRI policy that excludes companies that serially flout the ten principles of the UN Global Compact. AGI, which has a large Paris office, will run a smart beta strategy. 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 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 €8.5bn treasury is its contributions buffer for future pension payments. The fund, which is housed within France’s €300bn Caisse des Dépôts et Consignations (CDC) sovereign wealth fund, carries out its own manager selection. The fund has taken a number of major steps in recent months to increase its environmental commitment. At the end of November, the fund published the carbon footprint of its €2.4bn equity portfolio. In October 2015, it announced a big step to reduce the C02 exposure of a slug of its investments and invest in green energy by reconfiguring approximately €1bn in assets run for it by Allianz Global Investors towards a low carbon/environmental opportunities equities strategy.
It has also signed the Montreal Carbon Pledge, which is overseen by the Principles for Responsible Investment (PRI). Ircantec is a PRI signatory. In 2013, it published a comprehensive charter setting out how it applies responsible investment to its equity holdings based on the PRI and UN Global Compact, as well as outlining its corporate governance and share voting strategy.