One of the UK’s largest defined contribution master trusts has handed close to two-thirds of its £32bn in assets to be handled in passive equities by Amundi, with £8bn of active fixed income going to Invesco Asset Management. State Street Global Advisors, which was previously the sole manager, will see its brief shrink to roughly £4bn.

The People’s Pension said the new appointments have a focus on responsible investment, and follow its announcement last year that it will expect asset managers to be net zero aligned and have adequate stewardship resources.
   

   

The hire of a French fund house for £20bn in assets comes amid growing unease among European investors over several large US asset managers leaving climate collaboration initiatives to conform with the new US government's views on environmental and social matters.
   

“By selecting Amundi and Invesco, we have chosen to prioritise sustainability, active stewardship, and long-term value creation for our near seven million members,” said trustee chair Mark Condron. 

Chief investment officer Dan Mikulskis said: “As one of the fastest growing asset owners in the UK, we have a responsibility to deliver strong, sustainable returns for our members and a best-in-class investment strategy. Both managers bring exceptional expertise and share our commitment to responsible investment, which is central to our approach.” 

The new asset managers will take up their mandates by the end of March. 

The passive equity portfolio given to Amundi consists of five regional sleeves covering major developed markets and will continue to include climate-focused indices. Amundi, part of cooperative bank Crédit Agricole, will also provide People’s with environmental, social and governance data, metrics, reporting and data analytics through Amundi Technology’s ALTO platform. 

The fixed income mandate awarded to Invesco is net zero aligned and comes with active engagement. It includes sovereign bonds, investment grade credit, and high yield bonds issued in the UK, US, Europe and emerging markets. It also incorporates defined maturity buckets, which People’s said will allow for greater precision in managing risk and liquidity. Fixed income currently forms 20% of People’s main growth stage default and 60% of the retirement default. 

State Street Global Advisers, which currently manages the entirety of the master trust’s investments, will keep the remainder of the portfolio, estimated to be about £4bn to £5bn.