The French Public Service Additional Pension Scheme (ERAFP) has awarded three Socially Responsible Investing (SRI) mandates for emerging market credit bonds.

In July 2024, ERAFP launched a tender to appoint managers for discretionary, conviction-based and non-benchmark emerging market credit mandates.

Following the selection process, the scheme awarded an active mandate to Aberdeen Investments, alongside two standby mandates to CPR Asset Management – following its merger with BFT IM – with management delegated to Legal & General Investment Management, and to Myria Asset Management, with management delegated to Goldman Sachs Asset Management.

ERAFP said the lead manager will seek to deliver the best possible returns while limiting default risk. Portfolios will focus on bonds issued by private or quasi-sovereign borrowers in emerging markets and denominated in major currencies such as the US dollar or euro.

Investment decisions will be driven primarily by fundamental analysis at issuer and bond level, with an emphasis on broad diversification. Portfolios will be managed with a buy-and-hold approach, favouring holding securities to maturity and keeping overall turnover low.

The mandates will be implemented in line with ERAFP’s SRI framework and are intended to support the scheme’s climate objectives, including commitments made under the Net Zero Asset Owner Alliance.

The total allocation across all mandates is expected to be around €500m over the life of the contracts. Two of the three mandates are standby arrangements, allowing ERAFP to activate them if required, particularly for risk diversification purposes.

The initial contract term is four years, with an option to extend for a further two years.

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