ERAFP is responsible for €38.3bn of assets and serves roughly 5.8m current and former civil service workers across France. Its strategy centres on three ‘pillars’: long-term investing, responsible investing, and innovative investing.

In 2022, ERAFP established two major new mandates. The first focuses on real estate and consists of four core and core-plus segregated portfolios, two of which are France focused; the other two have a wider European scope. In total the allocations are worth €5bn.

Real estate matches its long-term investment horizon and requires an innovative approach to implement an appropriate approach to environmental, social and governance (ESG) criteria. This includes contributing to achieving ERAFP’s carbon neutrality target by 2050. Investments are only made into new buildings that comply with high environmental standards, ensuring that the portfolio’s environmental impact is kept as low as possible.

ERAFP has appointed asset managers that have tools to provide ESG scores that are adapted to each building’s specifics. The strategy is designed to be dynamic, integrating bespoke ESG requirements and with the potential to add value through active asset management.

The second major mandate issued in 2022 consists of 11 segregated accounts for European and Japanese equity strategies, with ERAFP investing a total of €11.5bn. The mandates are focused on passive strategies in the most liquid, efficient segments of the asset class where it is difficult to outperform the market.

Two euro-denominated equity mandates were designed to replicate customised indices that integrate ERAFP’s specific ESG stock selection rules. As part of the RFP process, the pension fund put a strong emphasis on asset managers’ ability to implement its engagement and voting guidelines and to monitor climate-related indicators.