FRANCE - Government endowments helped the Fonds de Réserve pour les Retraites' (FRR) assets rise by €3.3bn (US$4.8bn), despite its investments only producing a 4.8% return net of fees.
A statement from FRR said: "The market environment - in particular the last quarter of 2007 - adversely impacted the FRR's annual results.
"Even though the fund was not directly exposed to securitised vehicles, and little exposed to credit in general, it was hurt by the sharp decline in the market near the end of the year."
The fund's annualised return fell from an average 9.9% quoted at the end of September 2007 to 8.8% at the end of the year.
In 2006, the FRR posted a €4.5bn annual return.
At the end of 2007, the €34.5bn FRR held 64.5% in equities and 33.5% in fixed income, the remaining 2% was made up by diversified assets and cash.
In October, the FRR launched a search for two managers for passive replication of commodities indices.
Elsewhere, ERAFP, the pension scheme for French public servants, announced its chief executive, Jean-Louis Nakamura, would leave the fund at the end of February, after joining in August 2007.
Nakamura, previously chief investment officer at the FRR, replaced ERAFP's Phillipe Caïla who resigned in July 2007 to become President Sarkozy's deputy chief of staff. Nicolas Sobczak, a former executive director at Goldman Sachs, was appointed CIO of FRR to replace Nakamura.
ERAFP said Isabelle Szendy, deputy CEO, would deputise whilst Nakamura's replacement was found.
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