Nordea Asset Management has been awarded a near €1bn (£870m) ESG-focused European covered bond mandate by ABN AMRO Investment Solutions (AAIS).
The mandate will be run by the firm’s fixed income rates team, which has over 20 years’ experience in the covered bonds space and is already managing over €40bn.
AAIS maintains a core allocation to European covered bonds, reflecting its conviction the asset class offers low-risk investment opportunities with higher returns compared to traditional government bonds.
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Covered bonds, issued by banks or mortgage lenders and backed by pools of assets such as residential mortgages or public-sector loans, are increasingly seen as a compelling alternative to government debt due to their dual layers of protection, Nordea AM said.
They have been issued for over 200 years with no recorded defaults.
Nordea AM’s methodology for sustainability in covered bonds incorporates an exclusion framework and a responsible investment process, from research to portfolio construction.
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François Xavier Gennetais, chief executive at AAIS, said: “This mandate demonstrates the robustness of our open architecture model and our ability to select and work alongside leading investment specialists.
“We are delighted to partner with Nordea AM to deliver a solution that combines strong governance, investment alignment and in depth expertise.”
Christophe Boucher (pictured), chief investment officer, ABN AMRO Investment Solutions, added: “The ABN AMRO Nordea European Covered Bonds fund is managed by a stable and experienced investment team with long standing expertise in the covered bond market, particularly in Scandinavia.
“The strategy has demonstrated a consistent ability to generate value relative to its benchmark over a full market cycle.”
