The Fonds de Réserve des Retraites (FRR) has implemented an absolute-return approach to investment, Citywire reports. The €37 billion French pension fund has altered its investment model as it has a shorter payment period between 2011 and 2024 and has to pay out €2.1 billion on a specific date every year.
The new investment model is more like an absolute-return portfolio than a traditional long-term investment. Assets, such as high yield and emerging markets, along with tools such as derivatives, form an important part of the model. Capital protection is also a crucial part of the new strategy.
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