L’etablissement de Retraite Additionnelle de La Fonction Publique, Paris, hired AXA Investment Managers to run a U.S. dollar-denominated socially responsible investment bond portfolio.
The hire is part of the €16 billion ($19.9 billion) pension fund’s policy to broaden its investments, said a news release published on the pension fund’s website Thursday.
The pension fund also hired two standby managers, Loomis Sayles & Co. and CCR Asset Management. ERAFP can activate these managers if it chooses to diversify risk.
The up to €400 million allocation will be invested mainly in U.S. dollar-denominated bonds, from issuers registered in Organization for Economic Cooperation and Development countries, and securities issued or guaranteed by a sovereign state or local authority. The allocation will also be hedged against foreign-exchange risk.
The hired managers will comply with ERAFP’s SRI requirements and will be required to analyze each investment in the portfolio with regard to the pension fund’s SRI charter. The release said managers could use third-party providers for this purpose.
The contracts run for five years, with options for three one-year extensions.
A spokeswoman for the pension fund could not be reached for comment by press time.