Europe’s largest asset manager Amundi has signed a new mandate to manage derivative contracts for Nest.
Nest is the UK’s largest master trust, in terms of member numbers, and now has than £24bn of assets under management. It says this new deal will enhance the management of its investment portfolio.
Amundi will be providing Nest access to derivative contracts for two main objectives in the scheme’s portfolio:
- to rebalance Nest’s portfolio to target exposures when it’s proving difficult to do through equity and credit markets.
- to reduce drag on performance by equitising cash set aside for private market deployment.
This announcement builds on Nest’s existing partnership with Amundi, having chosen the fund manager to manage its active emerging market debt portfolio in 2016, and a private credit mandate in 2019.
Nest’s head of public markets and real estate Anders Lundgren, says this contract will play a crucial role for Nest in specific circumstances.
“We’re pleased to enhance our existing partnership with Amundi. They continue to demonstrate a strong handling on both managing ESG risks and our credit exposure, both crucial elements as Nest grows in size and influence.
“We saw during the pandemic that when markets are volatile it can be very difficult to quickly rebalance portfolios. Derivatives provide a great solution, allowing us to quickly reach target exposures and ensure our members benefit when markets recover.
“This mandate can also put any capital we have saved up for our private market investments to good use. We want to avoid any drag on performance and keep our members’ money busy to help boost their pension pots.
“We’re not committing to deploy a fixed amount of money to this mandate. We’ll use derivatives in specific circumstances, helping us to continue building a sophisticated investment strategy for all seasons.”
Amundi CEO Philippe d’Orgeval adds: “We are pleased to continue growing our partnership with Nest, by supporting their members with solutions to protect and grow their retirement savings. This unique mandate will help reduce various risks, make portfolio management more efficient, and is a useful way to gain exposure to various assets and investment opportunities as we enter a challenging investment environment.”
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