Fonds de Reserve pour les Retraites, Paris, will search later this year for managers investing in companies that primarily do business in emerging markets, said Philippe Aurain, chief investment officer at the €37.4 billion ($51.4 billion) fund.
The FRR is looking to invest €800 million in the strategy, he said in an interview.
“We would like to include an emerging markets equity process that provides high exposure to emerging countries but through companies based in developed markets,” Mr. Aurain said. Though some such strategies already exist, “we would like emerging markets managers to propose a more sophisticated approach,” Mr. Aurain said.
Current strategies rely too much on large-cap stocks with emerging markets exposure, he said. He'd like to see strategies that look at the small-cap universe, focus on earnings or growth instead of current revenue, or incorporate environmental, social and governance factors into the investment process.
The search is expected to start by the end of the year.