French pension reserve fund appoints private debt managers

France’s Fonds de Réserve pour les Retraites (FRR) has awarded private debt mandates to Idinvest Partners and Lyxor International Asset Management, marking another step in the €37.2bn pension reserve fund’s rollout of a new allocation to domestic illiquid assets.

The mandates awarded to Idinvest and Lyxor were for investment in acquisition-related debt to SMEs or “medium-sized” companies, an additional size category of companies used in France (going by the acronym of “ETI”).

Up to €300m could be deployed under the mandates, which are initially for 12 years.

The intention is for this money to finance or refinance an acquisition, or an “external growth operation”.

FRR intends to announce the outcome of a related tender soon, for private placements.

This will also target the financing of domestic SMEs or medium-sized companies.

The mandates were put out to tender in May last year.

FRR is also looking to award venture capital and private equity mandates as part of its move to build up a portfolio of French illiquid assets following government approval in late 2014/early 2015.

Another large French pension investor, civil service pension fund ERAFP, earlier this week announced the outcome of a tender of infrastructure and private equity mandates as it, too, follows up on investment leeway granted by the government.