The People’s Pension (TPP), one of the UK’s largest independent pension funds, has made a strategic decision to move £28 billion ($35.3 billion) of its assets to Amundi and Invesco, signaling its stronger commitment to responsible investment, sustainability, and climate-focused strategies. This move comes after a thorough review of the fund’s ESG (Environmental, Social, and Governance) priorities, aiming to enhance long-term value for its nearly seven million members.
A Shift in Asset Management Strategy
Previously, State Street managed the entirety of TPP’s portfolio. However, after this review, TPP chose to appoint Amundi, Europe’s largest asset manager, to manage £20 billion ($25.2 billion) in developed market equities using a climate-focused index strategy. Amundi will also offer robust ESG data, reporting, and analytics through its ALTO platform.
Meanwhile, Invesco will take charge of £8 billion ($10 billion) in fixed income investments, aligning with TPP’s net-zero targets. Known for its active engagement with issuers, Invesco has a proven track record in sustainable investing and is committed to maintaining ESG principles throughout its investments.
Why Amundi and Invesco?
TPP’s decision reflects its drive for responsible investing that balances strong financial returns with sustainability. Jean-Jacques Barbéris, Head of Institutional & Corporate Clients at Amundi, commented on the partnership, stating, “This collaboration is a testament to the strength of our diverse investment solutions, and we are proud to help TPP achieve its net-zero goals.”
On the other hand, Tony Wong, Senior Managing Director at Invesco, expressed excitement about the long-term partnership, noting that Invesco’s expertise in global fixed income will help generate optimal outcomes for TPP’s members.
Moving Away from State Street
The move marks a significant shift in TPP’s investment approach, especially as State Street’s role diminishes. This reduction comes amid growing criticism over the asset manager’s declining support for ESG initiatives. In 2024, State Street supported only 6% of environmental and 7% of social shareholder proposals, raising concerns over its commitment to responsible investing.
A State Street spokesperson acknowledged the reduced role, stating, “We look forward to continuing our work with The People’s Pension on the remaining mandates.”
A Broader ESG Commitment
The move aligns with TPP’s updated Responsible Investment policy from April 2024, which prioritizes climate change, nature, and human rights. TPP’s goal is to encourage companies to adopt more sustainable practices and actively engage with investee companies rather than relying solely on exclusions.
Dan Mikulskis, Chief Investment Officer at People’s Partnership, described this transition as “a major evolution” for the fund. He added, “Both managers bring exceptional expertise and share our commitment to responsible investment, which is central to our approach.”
Looking to the Future
With this shift, TPP is positioning itself as a leader in sustainable investing, underscoring a growing trend among pension funds to diversify their managers and prioritize ESG goals. As Amundi and Invesco take the lead in managing TPP’s portfolio, the fund aims to deliver sustainable, long-term value while meeting its net-zero ambitions.
References:
- The People’s Pension Official Announcement
- Statements from Amundi and Invesco
