Nest launches new mandate with Amundi to enhance ability to manage its portfolio

• New mandate with Amundi provides access to the use of derivative contracts
• Specific uses of derivatives identified to rebalance Nest’s target allocations more efficiently and to equitise cash in order to boost investment performance

The pension scheme Nest, representing more than £24bn assets under management, has today confirmed a new mandate with Amundi, the largest European asset manager, to help make the managing of its portfolio more efficient.

Amundi will be providing Nest access to derivative contracts for two main objectives in the scheme’s portfolio:

• To rebalance Nest’s portfolio to target exposures when it’s proving difficult to do through equity and credit markets.
• To reduce drag on performance by equitising cash set aside for private market deployment.

This announcement builds on Nest’s existing partnership with Amundi, having chosen the fund manager to manage its active emerging market debt portfolio in 2016, and a private credit mandate in 2019.

Anders Lundgren, Nest’s Head of Public Markets and Real Estate, believes this contract will play a crucial role for Nest in specific circumstances.

“We’re pleased to enhance our existing partnership with Amundi. They continue to demonstrate a strong handling on both managing ESG risks and our credit exposure, both crucial elements as Nest grows in size and influence.

“We saw during the pandemic that when markets are volatile it can be very difficult to quickly rebalance portfolios. Derivatives provide a great solution, allowing us to quickly reach target exposures and ensure our members benefit when markets recover.

“This mandate can also put any capital we have saved up for our private market investments to good use. We want to avoid any drag on performance and keep our members’ money busy to help boost their pension pots.

“We’re not committing to deploy a fixed amount of money to this mandate. We’ll use derivatives in specific circumstances, helping us to continue building a sophisticated investment strategy for all seasons.”

Commenting on the announcement Philippe d’Orgeval, CEO of Amundi UK, said:

“We are pleased to continue growing our partnership with Nest, by supporting their members with solutions to protect and grow their retirement savings. This unique mandate will help reduce various risks, make portfolio management more efficient, and is a useful way to gain exposure to various assets and investment opportunities as we enter a challenging investment environment.”

Ends.

Notes to editors

Any media queries for Nest can be directed to Ben Ward: Ben.Ward@nestcorporation.org.uk, 07881 511845

Any media queries for Amundi can be directed to Jais Mehaji: jais.mehaji@amundi.com, 07500 558 924

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About Nest

Nest was set up by the government to ensure every UK employer could offer a workplace pension to their employees. Since then, it’s grown to become the largest workplace pension scheme in the country with more than 10 million members. One in three of the UK working population currently have a retirement fund with Nest.

As a profit for members pension scheme, Nest doesn't answer to shareholders. It’s set up to serve its customers’ interests and aims to help millions of people enjoy a better retirement. Nest’s members benefit from an award-winning investment strategy and one of the most diversified DC portfolios in the UK. By the end of the next decade Nest is expected to have around £100bn assets under management.

About Amundi

Amundi, the leading European asset manager, ranking among the top 10 global players(1), offers its 100 million clients - retail, institutional and corporate - a complete range of savings and investment solutions in active and passive management, in traditional or real assets.

With its six international investment hubs(2), financial and extra-financial research capabilities and long-standing commitment to responsible investment, Amundi is a key player in the asset management landscape.

Amundi clients benefit from the expertise and advice of 5,300 employees in 35 countries. A subsidiary of the Crédit Agricole group and listed on the stock exchange, Amundi currently manages more than €2.0 trillion of assets(3).

(1) Source: IPE “Top 500 Asset Managers” published in June 2021, based on assets under management as at 31/12/2020
(2) Boston, Dublin, London, Milan, Paris and Tokyo
(3) Amundi data including Lyxor as at 31/03/2022