France’s Établissement de Retraite additionnelle de la Fonction publique (ERAFP) is launching a call for tenders to award three management mandates for a portfolio of emerging market SRI bonds.

This includes one active and two so-called stand-by mandates, which means that ERAFP reserves the right to activate these mandates for risk dispersion.

The mandates are expected to be in the region of €500m over the total duration of the contract. The initial duration of the contract is four years, with the possibility for ERAFP to renew the contract for two years.

The manager's objective will be to develop a non-benchmarked conviction management of an emerging market credit bond portfolio to obtain the best return possible while minimising default risk.

The pension fund said the management process will consist of selecting bonds from private or quasi-sovereign issuers denominated in one of the world's major currencies (USD, EUR, ...) and belonging to an emerging market country.

“Portfolio construction should be carried out by the manager essentially on the basis of fundamental analysis of each issuer and each bond, ensuring broad diversification. The portfolio should be managed with a focus on holding securities to maturity and limiting overall turnover,” ERAFP said.

This strategy will be carried out in compliance with ERAFP's SRI provisions.

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