The People’s Pension has awarded a £3.6bn emerging markets mandate to Robeco – the latest in several investment strategy changes as it gears up for a period of growth.
The £38bn master trust has shifted to an active, quantitative investing approach as part of the move, it said in a press release. The allocation was previously passive and run by State Street.
People’s said the new mandate ensured “greater alignment with the scheme’s evolving responsible investment policy”, as well as aiming for higher risk-adjusted returns.
It also cited “structural challenges” in emerging regions and indices, and said a quantitative approach would allow the master trust’s investment team to “set the necessary guardrails to ensure a long-term risk-controlled investment approach to generate good member outcomes”.
The selection process took nine months and was led by the People’s Pension’s in-house equity team. The master trust formally launched an in-house investment unit earlier this year as it seeks to become a “world-class asset owner”.
“This development is consistent with our aim to deliver the very best returns to members with a best-in-class responsible investment approach.”
Mark Condron, People’s Pension
Dan Mikulskis, chief investment officer at People’s Partnership, the provider of People’s Pension, said appointing Robeco was “the culmination of an exhaustive search for a partner that aligns to our core investment beliefs”.
The master trust said Robeco was selected for its strength across all seven areas of analysis used by the manager selectors, including performance, portfolio construction and execution, resources, risk management, “firmwide considerations”, responsible investment, and “partnership capabilities”.
Mark Condron, chair of The People’s Pension trustee board, said: “Forming strong partnerships – such as the one we are forging with Robeco – is central to our strategy. This development is consistent with our aim to deliver the very best returns to members with a best-in-class responsible investment approach.”
In February, The People’s Pension appointed Amundi and Invesco to run equity and fixed income mandates worth £28bn, replacing State Street. Last month, it adjusted its pre-retirement portfolio to reduce cash and gilts holdings.
