ERAFP launches call for tenders for diversified funds and US equities

The French public sector additional pension scheme (ERAFP) has launched a call for tenders for the allocation of four diversified fund of funds management mandates, and several US equity mandates.

Its multi-asset management mandates awarded in 2013 will expire in March 2021, so the fund is the launching a call for tenders for the allocation of four diversified fund of funds management mandates (two active and two stand-by mandates).

“The objective for the two mandate holders will be to maximise performance while continuously seeking to deliver the best possible risk-return ratio by implementing diversified, flexible, tactical, dynamic and opportunistic asset allocation.

“The managers will adopt a fundamental approach, without being tied to a benchmark, to build a portfolio based on a rigorous asset allocation and fund selection process in compliance with ERAFP's SRI framework,” the fund stated.

ERAFP requires the successful applicant to seek to maximise the portfolio's performance while limiting its one-year losses by implementing a risk budget measured with reference to the maximum loss over a calendar year. It must also be able to assess the robustness of the processes used to integrate ESG factors put in place by the firms managing the underlying funds.

“As an indication, the overall amount invested under the two active mandates, upon the launch of the two new mandates, will be around €1bn. The mandate will last four years and can be renewed for two successive one-year periods, for a maximum duration of six years," it stated.

In addition, it is also launching a call for tenders in two lots with a view to awarding three mandates to manage US mid-cap equities (one active mandate and two ‘stand-by’ mandates) and four mandates to manage US large-cap equities (two active and two ‘stand-by’ mandates).

"As an indication, the investment amount for the active US mid-cap mandate will be in the order of €150m and that for the two active large-cap mandates will be in the order of €1.1bn overall," ERAFP noted.

The mandates are for an initial term of five years; ERAFP may renew the contracts for two successive one-year periods, giving a maximum possible term of seven years.

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