Professional Pensions | 11 March 2013
EAPF pumps £350m into ESG strategies
The Environmental Agency Pension Fund has moved £350m into environmental, social and governance strategies as it seeks to invest a quarter of its assets in the ‘green economy’ by 2015.
Legal & General and Informed Portfolio Management lost out as the EAPF appointed four ESG managers over the past six months.
The new managers are all signatories of the United Nation's principles for responsible investment.
EAPF head Howard Pearce said the fund had disinvested from a Legal & General passive global equity fund to move £170m into two segregated low volatility global equity ESG mandates with Robeco and Quoniam.
Informed Portfolio Management saw a £50m active currency mandate terminated to fund a £55m investment in the First State Global Emerging Markets Sustainability fund and ended a £600m passive currency mandate in a switch to Northern Trust.
PP reported last August that the scheme was set to drastically reduce its gilt holdings from 13% to 5% in favour of corporate bonds (PP Online 23 August 2012).
The EAPF invested £100m in a Pimco unconstrained global bonds fund and a further £50m in UK corporate bonds with existing manager Royal London Asset Management, taking the RLAM mandate to £180m.
These moves were funded by disinvestment from an L&G passive corporate bond fund, gilts, and cash.
The EAPF has also committed £15m to a new Generation Investment Management Sustainable Global Credit Fund and topped up its ESG screened £130m fund of fund private equity commitments managed via Robeco-SAM by £10m.
The fund is still seeking a manager for a £245m ‘real asset' mandate, set to include £90m in property, £90m in infrastructure and £65m in forestry and farmland.
The EAPF is now at the short-listing stage, having had interest from 26 asset managers, and hopes to appoint a specialist who is a UNPRI signatory by April 2013.
