On the go: Master trust Nest has appointed a manager to help make its portfolio management more efficient through the use of derivative contracts.
Nest has hired Amundi Asset Management to improve its ability to manage its own portfolio.
Amundi will handle derivative contracts for two main objectives: to rebalance Nest’s portfolio to target exposures when it is proving difficult to do so through equity and credit markets, and to reduce drag on performance by equitising cash set aside for private market deployment.
Amundi was chosen out of managers already under Nest’s management roster. The manager was first appointed in 2016 to handle an active emerging market debt mandate, and was awarded a further private credit mandate in 2019.
Anders Lundgren, Nest’s head of public markets and real estate, commented: “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,” he continued.
Lundgren also confirmed that Nest will not be committed to deploying 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.”
According to a notice on the UK government’s Contracts Finder procurement portal, the contract began on April 27 2022 and will run until April 26 2026.
This article originally appeared on MandateWire.com
