FRANCE - The Fonds de Réserve pour les Retraites has launched a selection process aiming to award two mandates for passive replication of commodities indices.
The mandates would be worth approximately €2bn.
The development is part of the revised strategic allocation decided on by the Fonds de Réserve pour les Retraites (FRR) Supervisory Board in 2006, and a primary aim of the asset shift is to achieve greater diversification and reduce the Fund’s overall risk exposure.
Earlier in the year the €31.8bn FRR was prompted to start investing in the asset class, working through its overlay manager and commodity index futures, and the FRR said it had already begun to reap the benefits of the diversification strategy in the special market environment that had prevailed during the year, most notably last summer.
The FRR said it would be looking to select investment service providers whose brief would be to choose counterparties for the FRR, to carry out commodity index swaps, to transact in accordance with “best execution” obligations and to manage the related cash.
The mandates would be for a period of four years and the deadline for submissions is 19 November 2007.
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