FRANCE - Fonds de Réserve pour les Retraites (FRR) has created an investment strategy committee that will help design, implement and monitor the scheme's asset allocation.
"To this end, it shall review the quarterly report presented by the executive board on the results of the management of the benchmark portfolio, the annual economic and financial outlook, and the short-and medium-term risks that could have an impact on the long-term performance trend of the fund," the scheme said of the new committee.
The committee will meet four times a year. The members are Jean-Christophe Le Duigou, who represents employee trade unions; Alain Leclair, representing employer trade unions and Hervé de Villeroché, representing the Ministry of the Economy. Jean-Louis Beffa and Raoul Briet will both represent the college of qualified individuals, FRR said Friday.
The creation of the committee comes as FRR explores ways in which environmental factors can be implemented in the investment decision-making process.
FRR released a working paper last week that said climate change, dwindling fossil fuel resources, loss of biodiversity and the threat of water shortages are the biggest environmental issues facing long-term investors.
The scheme's working paper said an investor can modify its risk/return hypotheses based on how changes in the environment will affect various asset classes or can introduce environmental assets, like timber or carbon, to address these issues.
The creation of the committee also comes as the scheme is in the process of implementing a new asset allocation that was approved in June.
The new allocation earmarked 45% to equities, 25% to fixed-rate bonds, 20% to indexed bonds and 5% each to real estate and commodities. Investments in equities, real estate and commodities combined can range from 40% to 60%.
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