Large UK pension pulls more money from State Street over ESG
People’s Pension, which runs £38bn in assets, is aiming to align its investments with the Paris Agreement goal of keeping global warning below 1.5C but some US asset managers are pivoting away from ESG investments (Sebastien Nogier/EPA-EFE)
The UK’s largest commercial master trust has pulled £3.6bn from State Street and appointed Robeco to managed its emerging markets equity portfolio.
The decision by People’s Pension to appoint Robeco comes as part of its continuing shift toward responsible investment, a move which led to it pulling £28bn from State Street earlier this year.
Many US asset management companies are pivoting away from environmental, social and governance investments due to the scepticism from Donald Trump’s administration. But People’s Pension has sought to integrate a responsible investment approach into its portfolio management.
It is aiming to align its investments with the Paris Agreement goal of keeping global warming below 1.5C above pre-industrial levels.
In October State Street, by contrast, pulled its US operations out of a climate action industry group.
Mark Condron, chair of The People’s Pension trustee board, said: “Today’s announcement is fantastic news for our seven million members as Robeco is committed to enabling us to deliver the very best returns.
“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.”
The appointment of Robeco - after a nine-month selection process - also represents a shift from a passive to an active approach for the master trust, which runs £38bn in assets.
This is due to what People’s Pension says are “structural challenges” it has observed in markets and indices in the region.
Dan Mikulskis, chief investment officer at People’s Partnership, the provider of People’s Pension, said: “The appointment of Robeco is the culmination of an exhaustive search for a partner that aligns to our core investment beliefs.
“Their cutting-edge approach will enable us to maximise the very best value from emerging markets. Our belief is that a selective active investment approach will lead to better returns for members. This is the latest step towards us achieving our goal of becoming a world class asset owner.”
State Street still runs a proportion of the People’s Pension portfolio but this is now limited to just its global listed infrastructure holdings.
