The People’s Pension (TPP) – one of the UK’s largest pension funds – has appointed Amundi and Invesco to oversee large parts of its investment portfolio, with State Street side-lined as the trust prioritises “sustainability, active stewardship and long-term value creation”.
Amundi will manage £20bn in passive developed market equities, while Invesco will take responsibility for more than £8bn in fixed income investments for the £32.5bn defined contribution (DC) scheme. State Street will continue to manage just $4.5bn in assets at TPP, having previously managed all of its assets.
According to TPP, both appointments “represent 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.
Dan Mikulskis, chief investment officer at People’s Partnership – which ran the selection process – said: “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. Both managers bring exceptional expertise and share our commitment to responsible investment, which is central to our approach.”
Earlier this month, ShareAction accused State Street – alongside BlackRock, Fidelity International and Vanguard – of “the worst voting performance yet” on shareholder resolutions aimed at tackling social and environmental issues, with the largest asset managers collectively supporting just 7% of key shareholder resolutions. The firm also left the Climate Action 100+ initiative last February.
This comes against the backdrop of increased pressure on US-based firms’ engagement processes. The US Securities and Exchange Commission, for example, has recently imposed more restrictions on investor activism, something considered by many to be an attack on ESG investing.
Responding to PA Future, a spokesperson at State Street said: “SSGA is focused on providing best-in-class service to our clients and growing our franchise in the UK DC market and the other markets we serve. Our business has been expanding in recent years as we form new partnerships, and we have a strong pipeline of opportunities for 2025. We look forward to continuing our work with The People’s Pension on the remaining mandates.”
Responsible investment commitments ‘a key factor’
The passive equity portfolio awarded to Amundi consists of five regional sleeves covering major developed markets and will continue to include climate-focused indices aligned with TPP’s responsible investment policy.
Amundi said its responsible investment commitments were “a key factor” in its appointment. Jean-Jacques Barbéris, head of institutional and corporate clients division, ESG supervisor, Amundi, added: “Clients are increasingly in search of bespoke investment solutions that are able to deliver strong risk-adjusted returns combined with a comprehensive commitment to responsible investment. This partnership with TPP is a testament to the strength of our wide-range of investment solutions and we are thankful to TPP for selecting us as a key partner in helping them achieve their net zero investment ambitions.”
Meanwhile, the fixed income mandate awarded to Invesco spans sovereign bonds, investment-grade credit and high-yield bonds across the UK, US, Europe and emerging markets. The mandate also incorporates defined maturity buckets, allowing for greater precision in managing risk and liquidity. Invesco’s approach is expected to feature net zero alignment alongside ESG analysis and active engagement with issuers designed to promote sustainable business practices while delivering robust long-term returns.
Mark Condron, chair of trustees for The People’s Pension, commented: “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. By selecting Amundi and Invesco, we have chosen to prioritise sustainability, active stewardship and long-term value creation for our near seven million members.”
