The spillover of US culture wars into asset management is apparently having a major effect on investment mandates awarded by pension funds.
After UK pension manager The People’s Pension withdrew mandates worth up to US$35 billion from State Street in favour of Amundi and Invesco, largely over sustainability concerns, earlier this year, Bloomberg warned that the mandates lost by the US asset manager expose growing risk in Europe.
That risk to US asset managers, and to asset managers that fall in line with the Trump administration’s anti-environmental, social and governance push, is evidently still increasing.
PGGM, the asset management arm of Dutch pension fund Pensioenfonds Zorg & Welzijn (PFZW) has now awarded two mandates totalling 15 billion euros ($17.6 billion) to Robeco. The investments will be in systematic equity and credit, with strong sustainability characteristics.
Robeco, which announced the mandates, stressed its sustainability capabilities, including a focus on forward-looking climate analysis and the United Nations-backed sustainable development goals. “There is a growing demand for similar solutions,” according to the company.
Meanwhile, Bloomberg reported that PFZW has pulled a $4.7 billion mandate from hedge fund AQR Capital Management, $17 billion from BlackRock, and $17.6 billion from L&G, all primarily due to sustainability priorities. PGGM also selected Schroders as a substitute for the withdrawn mandates, with a $4.58 billion allocation.
Other pension fund investors in the UK, the European Union and beyond, are also acting on their sustainability commitments.
In March, French pension plan Ircantec announced the selection of Nordea Asset Management and Oddo BHF Asset Management to run a sustainability focused global equity mandate worth $939 million. A month earlier, French pension Caisse des Dépôts awarded a $2.11 billion mandate to Nomura Asset Management to invest in sustainable equity.
Brunel Pension Partnership, a $48.8 billion UK local authority pension fund, published a climate change progress report in June, underlining its success in reducing the carbon intensity of its portfolio. “Climate change is still a universal, systemic risk – one that investors cannot afford to ignore. It is enormously important that asset owners set out a clear climate strategy,” Laura Chappell, Brunel’s chief executive officer, said in the report.
Being fenced out of major markets is hardly the goal of any financial strategy, but that seems to be exactly the knock-on effect of the Trump administration’s anti-ESG moves.
