ESG Gains Traction in California

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    Stockholm (NordSIP) – The largest pension fund in the United States, CalPERS, which manages the pensions and health benefits for California public employees, with AUM of more than US$350 billion, hired AXA Investment Managers’ quantitative arm Rosenberg Equities for a US$1 billion ESG equity mandate.

    The mandate consists mainly in a model implementation portfolio and is part of the pension fund’s US$22 billion alternative beta allocation, which is entirely invested through model implementation strategy. Unlike other pension funds who invest directly in asset managers’ comingled products or managed accounts, CalPERs hires managers to build a model taking into account the pensions’s own specifications, and then manages the assets internally.

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    “The model implementation approach gives CalPERS better control over its assets and generally lower fees,” said said Dan Bienvenue, the pension fund’s managing investment director, global equity in an interview, by Pensions & Investments.

    “It is great to see that things are moving in the US as well even if CalPERS is not necessarily representative of the whole market,” says Henrik af Donner of AXA Investments Managers in Stockholm, in a comment to NordSIP. Indeed, this is not the pension fund’s first committement to ESG. According to Bienvenue, this portfolio will be implemented similarly to another US$1 billion global equity ESG model implementation portfolio managed along the model provided by US-based quantitative manager QS Investors.

    Photo by Juan Salamanca from Pexels

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.
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