The French Public Service Additional Pension Scheme (ERAFP) has launched a call for tenders to appoint three asset managers to run multi-asset fund-of-funds portfolios, as part of the renewal of its external management mandates.

Under the tender, ERAFP will award one active mandate and two so-called 'stand-by' mandates, with the latter designed to be activated if required, particularly for risk diversification purposes.

The projected size of the active mandate is around €1bn.

The appointed manager will be tasked with maximising performance through a diversified, flexible, and opportunistic asset allocation, with a focus on optimising the portfolio's yield-to-risk profile.

The strategy will follow a fundamental, unconstrained approach, with no benchmark restrictions.

ERAFP said the portfolio would be constructed through a rigorous asset-allocation and fund-selection process, aiming to deliver consistent performance across asset classes and strategies while controlling downside risk.

It added that risk management would be based on a defined risk budget, measured by the maximum potential loss over a calendar year.

The mandates will be implemented in line with ERAFP’s socially responsible investment (SRI) framework.

The initial contract term will run for four years, with the option for ERAFP to renew the mandate for up to two additional one-year periods.

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