France’s pension reserve fund has tendered out 11 active management mandates for euro-denominated investment grade corporate bonds and high yield bonds for €5.5bn in total.

The current corporate bond mandates are due to expire next year, while Fonds de réserve pour les retraites (FRR) has previously gained exposure to high yield bonds by subscribing directly to investment funds.

Anne-Marie Jourdan, chief legal officer and head of public relations at the €33.6bn investor, said it had opted for a tender process for the high yield exposure including to avoid coming up against the 20% cap FRR has on investing through collective investment funds.

FRR is looking to award five euro high yield mandates for €1bn in total. Managers must have at least €250m in assets under management in active high yield strategies.

Six mandates, for €4.5bn in total, are up for grabs for euro investment grade corporate bonds, with managers in this case needing to have at least €850m in assets under management in actively managed strategies in this asset class. Managers would be allowed to invest up to 15% in sub-investment grade euro-denominated corporate bonds up to a double-B rating.

The current euro-denominated corporate bond mandate holders are: Allianz Global Investors, AXA Investment Managers, HSBC Global Asset Management, Insight Investment Management, Kempen Capital Management, and La Banque Postale Asset Management.

The mandates are for five years, with the possibility of a one-year extension.

FRR expects managers to be able to demonstrate how their investment processes incorporate environmental, social and governance considerations, and to integrate FRR’s exclusions and engagement policies.

ICGN seeks ‘model mandate’ input

The International Corporate Governance Network (ICGN) is seeking feedback on its guidance on what constitutes a model contract between asset owners and managers ahead of launching a consulation on the revised guidance later this year.

The organisation is aiming to review the guidance in light of developments since it was published in 2012.

”While the contents of the guidance are as relevant now as when it was first published, it may not fully reflect all the issues that matter to asset owners and their beneficiaries in 2020 or the nature of their relationship with asset managers,” said the ICGN.

“Nor does the guidance take account of changes made to regulation and standards in many markets since it was written.”

Questions being asked by ICGN include whether the guidance has been a useful resource for asset owners, and whether it would be helpful for ICGN to publish guidance on contracts between asset managers and investment consultants.

The consultation document can be found here.

WPP chooses voting and engagement provider

The asset pooling entity for the Welsh local government pension scheme (LGPS) funds has appointed Robeco as its voting and engagement provider following a procurement process.

As part of the appointment the Rotterdam-headquartered asset manager will help the Wales Pension Partnership (WPP) develop and frame a “robust” voting policy to be implemented across its £5bn active equity portfolio.

Robeco will also work with WPP on structuring engagement principles, undertake engagement activity on behalf of WPP, and provide ongoing training and reporting to the pool and its constituent local authorities.

Robeco has also been appointed for voting and/or engagement services by the Border to Coast Pensions Partnership and Local Pensions Partnership.

Topics