France’s Fonds de Réserve pour les Retraites (FRR) made a return of 9.06 per cent in 2025, according to its full-year results.

Its financial statement for 2025 was approved by FRR’s Supervisory Board in March. It revealed that equities and intermediate-risk assets returned 12.9 per cent in 2025, contributing 8.77 percentage points to overall performance, while hedging assets returned 1.9 per cent, contributing 0.4 points.

This boosted the fund’s assets under management to €20.7bn, up from €20.4bn at the end of 2024, an increase of €315m.

After its 15th payment to La Caisse d'Amortissement de la Dette Sociale (CADES), the FRR has now returned €3.6bn more than the capital initially allocated.

FRR said its portfolio benefited from “resilient global growth and declining inflation” throughout 2025.

“Despite tariff shocks that triggered a period of high volatility in spring 2025, uncertainty stemming from US economic policy, and ongoing geopolitical tensions, the global economy slowed only moderately. At the same time, easing inflation allowed central banks in advanced economies to loosen monetary policy,” it stated.

Since 2010, FRR equities and intermediate-risk assets have grown by 163.1 per cent, compared with 27.6 per cent for hedging assets.

During June 2025, FRR adopted a new strategic allocation, which has raised the weighting of equities to 50 per cent, 46 per cent of which are unhedged through option strategies. This is an increase of 4.5 percentage points compared with 2024, mostly offset by a reduction in the weighting of hedging assets.

“Portfolio developments in 2025 continue a trend initiated in 2023, with a gradual 13.5 percentage point increase in unhedged equities over the past two years (June 2023 to June 2025). This shift aims to raise projected long-term median assets without significantly increasing long-term risk compared with the previous allocation. Over the past two years, these decisions have generated an additional 0.9 per cent in annualised performance,” FRR stated.

The FRR also reflected on its strengthened support for small and medium-sized enterprises (SMEs) last year, in which it reallocated €100m to mandates focused on listed French small caps. The companies it focused on have experienced depressed valuations since 2018 despite solid fundamentals.

It also launched two tenders for the management of dedicated unlisted asset funds invested primarily in French SMEs and mid-sized companies (ETIs), totalling €1.1bn (€500m in private equity and €600m in unitranche debt), to support their growth and development.

Finally, in 2025, FRR made its first investments in highly rated European securitised assets, aiming to enhance yield at a comparable level of risk while further diversifying its bond portfolio and supporting the development of the European Capital Markets Union.

Since adopting its liability-driven investment model at the end of 2010, the fund has generated €15.6bn in additional value relative to the average cost of French government debt, including €1.5bn in 2025.

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