National Employment Savings Trust, London, selected Lombard Odier Investment Managers to manage a thematic equity allocation, which the master trust anticipates will reach £5 billion ($6.3 billion) by 2030.
The multithematic equity allocation will focus primarily on developed markets, a news release said. It will focus on sustainability megatrends which NEST currently believes will be driven by changes in reporting and disclosure requirements.
A procurement process was launched in May, with the plan receiving 29 applications from money managers.
The allocation will be run against the same benchmark as NEST's Climate Aware World Equity fund, which is managed by UBS Asset Management. NEST invested £130 million into the strategy in 2017.
The new allocation will operate separately to the Climate Aware World Equity fund because "the data is way too inconsistent both in its volume, and in its availability globally," said Liz Fernando, CIO at NEST, at a press briefing announcing the hire. "We felt we had no option but to go down the more active route with this."
"The themes we've chosen — climate mitigation and adaptation, natural capital, and social — are very interlinked and there are areas where there is already increasing requirements for disclosures to be made," she added.
In January, more than 300 organizations from 46 countries committed to reporting based on recommendations by the Taskforce for Nature-related Financial Disclosures.
NEST also has an ongoing search for a manager to run a timber allocation within its private markets exposure, for which it has reached the shortlist stage.
NEST has about £36 billion in assets.
Jasbir Nizar, U.K. CEO and global head of business development at LOIM, said in the news release: "System changes resulting from the sustainability transition will result in profound changes in business models, in value chains and in the organization of our economy."
"We have invested significantly in our resources and partnerships to create cutting-edge road-map research that translate these system changes into investment strategy, working seamlessly with our well-established active equities team," Nizar said.
