The French public additional pension scheme (ERAFP) has launched a call for tender to select four managers of USD-denominated SRI credit bonds for €1.2bn investment.
The tenders will include two active and two stand-by mandates. The objective for the managers selected will be to develop a non-benchmarked management approach to maximise returns while minimising default risk.
This strategy will comply with ERAFP’s social responsible investing (SRI) requirements and with a view to supporting the institution in implementing its climate commitments made notably as part of the Net Zero Asset Owner Alliance (NZAOA).
The portfolios will be invested mainly in USD-denominated bonds of private issuers located in an OECD country. Each asset manager will be responsible for building a portfolio on the basis of a fundamental analysis of each issuer, incorporating ERAFP’s environmental, social and governance (ESG) criteria and a technical analysis of the bonds.
Two of the four mandates awarded will be stand-by contracts, which means that ERAFP will decide whether to activate them or not, notably with a view to diversifying risk. The mandates are awarded for an initial term of six years but ERAFP may extend them for a period of two years.
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