​LD Picks Nordea For DKK1.2bn Sustainable Global Equities; Impax Exits

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In Denmark, Nordea Investment Management has been awarded an active global equity mandate worth an estimated DKK1.2bn (€161m) from LD Funds, which is to be run with an impact or sustainability investment strategy.

Copenhagen-based LD Funds, which is responsible for the pension funds Lønmodtagernes Feriemidler and Lønmodtagernes Dyrtidsmidler, announced it had awarded the contract to the Nordea unit following a public EU tender in which 17 offers were received.

The mandate is for up to five years, plus two additional 12-month extensions, with LD remaining able to terminate at any point.

The initial assets Nordea will be taking over when the contract begins in the first quarter of next year are those of the LD Funds’ DKK550m LD Environment and Climate sub-fund, and more resources will be added in time as the needs of the two funds LD runs change.

The environment and climate mandate is currently in the hands of Impax Asset Management, which took over the management of the sub-fund in January 2011.

Charlotte Mark, LD’s finance director, said: “Nordea has a strong team with many years of experience, and we find it very positive that Nordea is strengthening environment and climate through active ownership.

“Experience, stability, commitment to ESG and ESG integration in stock selection, together with active ownership, have been important parameters for our choice,” she said.

The tender was launched in June, dubbed the “Positive Pursuits” mandate, with LD searching for a manager offering global equity investment aligning with the criteria of the non-profit organisation Future-Fit, by creating positive impacts, by amplifying the positive impact of others, or by reducing negative impacts.

LD Funds said it had been crucial in the selection process that the new investment adviser should have an understanding of the active ownership cooperation it had established with Future-Fit.

When it announced the link up with Future-Fit, LD Funds would expect all its managers to promote use of the foundation’s tool to help companies progress towards the UN’s global sustainability goals.

Mark said the bidding round for the DKK1.2bn mandate had been “intense and exciting”, and that the array of bidders had been strong.

“Today there are many new and experienced managers in the field of sustainable investment, which makes it possible to have fairly ambitious goals,” she said.

Lønmodtagernes Feriemidler is a new fund currently being set up by LD Funds to hold and invest extra holiday allowances Danish employers are having to grant as a result of a change in employment law.

The fund is being run alongside the pension fund Lønmodtagernes Dyrtidsmidler which LD was originally set up to manage. This fund is gradually shrinking, deriving from cost-of-living allowances given to workers in the 1980s.

LD Funds is expecting to launch several tenders in the next year or more largely due to requirements of the new holiday fund.

It is preparing the scope for new mandates to replace existing contracts expiring in 2020.

Due to uncertainty about the size of the holiday allowance fund, the number of mandates is still unknown, but LD says it will potentially launch searches for a quant strategy and a couple of fundamental active managers.