The People’s Pension awards £28bn in mandates

Amundi will manage £20bn in passive developed market equities, while Invesco will oversee active fixed income mandates worth £8bn, the master trust announced yesterday (27 February).

These appointments replace State Street Global Advisors (SSGA), previously its sole asset manager. SSGA retained a mandate worth approximately £5bn, which includes The People’s Pension’s sharia investment offering.

In its announcement, The People’s Pension – which has approximately £32.5bn in assets under management – said the new appointments were “a step forward in achieving greater alignment with The People’s Pension’s stewardship approach and priorities and will allow it to continue to evolve these high standards”.

However, recent changes in environmental, social and governance policies made by some US asset managers also played a role in the decisions, chief investment officer Dan Mikulskis told the Financial Times.

Difference in approaches between US and European managers were becoming “more and more apparent”, he said.

In the announcement yesterday, Mikulskis said the appointments followed months of work by the in-house equity and fixed income teams as they readied The People’s Pension for the next phase of its growth.

“As one of the fastest growing asset owners in the UK, we have a responsibility to deliver strong, sustainable returns for our members and a best-in-class investment strategy,” he said. “Both managers bring exceptional expertise and share our commitment to responsible investment, which is central to our approach.”

The People’s Pension recently established an in-house investment unit, led by Mikulskis, and is actively recruiting for a private markets team.

The new mandates

Amundi will manage five regional “sleeves” covering major developed markets. The mandates are designed to align with The People’s Pension’s responsible investment policy.

Invesco’s fixed income mandate covers sovereign, investment grade and high yield bonds across the UK, US, Europe and emerging markets. It also includes buckets of assets with specific maturities, which allows for “greater precision in managing risk and liquidity”.

The master trust said Invesco was well placed to “serve as a long-term strategic partner”, with People’s set to grow substantially in the coming years.

The £28bn was recently moved into segregated mandates held by Northern Trust, the master trust’s custodian, which gives the internal investment team more control and flexibility in how it allocates capital.

Mark Condron, chair of trustees for The People’s Pension, said the master trust had opted to prioritise sustainability, stewardship and long-term investment through the new appointments.

He added: “Our move to segregated mandates alongside partnering with world-class asset managers demonstrates our ongoing commitment to being a leading force for positive member outcomes in the pensions industry.

“These appointments highlight The People’s Pension’s broader mission to balance strong financial performance with responsible investment principles.”