PBU, Copenhagen, the pension fund for early childhood and youth educators in Denmark, is considering reducing the number of money managers as it prepares to incorporate environmental, social and governance factors into its portfolios, CIO Carsten Warren Petersen told Pensions & Investments.
Mr. Petersen said the 65 billion Danish kroner ($9.7 billion) pension fund intends to collaborate with its 12 external managers on ESG-related matters and as a result will consolidate the number of managers and reduce the number of companies in its portfolio.
"Our view is that a responsible investment strategy ultimately involves knowledge about key ESG matters in the companies you are invested in and furthermore working with the companies as an active investor," Mr. Petersen said. "There are often dilemmas involved around ESG issues, leading to some decisions ultimately being based on our members values."
Mr. Petersen said the pension fund's equity managers will not be required to use overlay strategies in considering ESG as part of the analysis of a company in which they invest, but they will be expected to collaborate with the pension fund on the strategy.