France’s €8.5bn Ircantec hires three managers for €300m credit briefs

Fund makes second tranche of mandate awards for 2016.

Ircantec, the €8.5bn French public pension scheme, which has responsible investment principles as a significant part of its manager selection criteria, has hired three fund managers to run a pot of €300m dedicated to investment grade corporate bonds.
The fund has split the assets between DWS, the funds arm of Deutsche Asset & Wealth Management, Paris-based BFT Investment Managers and London-based Threadneedle Investment Services. The mandates are for five years and will be invested via French domiciled OPC mutual funds benchmarked against the Barclays Capital Euro Corporate index or an equivalent.
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.
When hiring fund managers, Ircantec takes into account ESG factors based on an internal charter. Notably, it stipulates that managers act in the long-term interests of its beneficiaries by targeting durable returns withinguideline risk tolerance that includes sustainability criteria based on international norms and the work of the UN-supported PRI.
Ircantec has finalised a number of investment mandate searches at the beginning of 2016. Earlier this month it 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.
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The fund has taken a number of major steps in recent months to increase its environmental commitment. At the end of November 2015, it 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.
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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.