France’s Fonds de Réserve pour les Retraites (FRR) has chosen the managers for a new batch of euro corporate bond mandates previously said to total some €5.5bn.
The €26.3bn sovereign fund launched the tender in May last year, ahead of the expiry this year of the then existing corporate bond mandates. For high yield FRR had previously gained exposure to the asset class through investment funds.
BlackRock, Candriam, Degroof Petercam Asset Management, DWS and Threadneedle have now been selected to manage euro high yield debt investments for FRR. For investment grade credit, mandates have been awarded to AXA, BlackRock, DWS, M&G and Union Investment. Six mandates had been up for grabs.
The mandates are for five years, extendible once for one year. FRR requires that asset managers take ESG aspects into account in their management processes, in particular by incorporating the fund’s exclusion policy (covering banned weapons, tobacco and coal) and engagement policy.
Finally, the selected asset managers will have to produce quantitative and qualitative reports illustrating the actions they have taken in this area.
Border to Coast launches £3.7bn multi-asset credit fund
Border to Coast Pensions Partnership, one of the UK’s investment pools, has launched its £3.7bn (€4.4bn) Multi-Asset Credit (MAC) Fund, taking the total investments the pool is responsible for to £34.6bn in its fourth year of operation.
The Partnership said in a statement that MAC is a key addition to its fund range, “offering an innovative and dynamic blend of fixed income specialists within one proposition to support the needs of its 11 Local Government Pension Scheme (LGPS) partner funds”.
Border to Coast appointed PIMCO as the strategy’s core manager in addition to four specialist managers – Wellington Management (global high yield), Barings (global leveraged loans), PGIM Fixed Income (securitised credit) and Ashmore (emerging market debt, local currency and corporate-focussed hard currency).
The pool said that with each manager focusing on a specific fixed-income asset class, partner funds would have access to a more diversified portfolio across a range of credit opportunities.
“The pooling governance structure also enables allocation between managers to evolve effectively with changes in the credit cycle,” it said.
The MAC fund offers cost-effective access to higher-yielding areas of the fixed-income market and has been designed to complement Border to Coast’s existing index-linked bond, investment grade credit and private credit funds.
Border to Coast will also manage a further mandate internally focussed on hard currency emerging market sovereign debt, it added.
Rachel Elwell, the partnership’s chief executive officer, said: ““We believe MAC is a truly differentiated fixed income offering for our partner funds, harnessing both external specialist managers and the internal expertise we have here at Border to Coast.”
She said the final amount invested at launch was 37% higher than originally committed, which demonstrates the continued support of Border to Coast’s partner funds and the value it can create for the LGPS funds.
The MAC fund is targeting a return of SONIA plus 3% to 4% over five-year periods.
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