People's Pension has appointed Robeco to manage its growing £3.6bn emerging markets equities portfolio, with the move to an active approach designed to deliver higher risk-adjusted returns to members.

This marks a shift from a passive approach to an active quantitative strategy for People’s Pension’s emerging markets portfolio, which is expected to help achieve greater alignment with the scheme’s evolving responsible investment (RI) policy, as well as deliver higher risk-adjusted returns to members.

People's Pension said that the decision comes as a result of structural challenges observed in markets and indices in the region, with the new strategy expected to allow People's Pension to set the necessary guardrails to ensure a long-term risk-controlled investment approach to generate good member outcomes.

Robeco was selected to manage the portfolio following an extensive research and due diligence process run by the equity team at People’s Partnership, the provider of People’s Pension.

During the nine-month long selection process, Robeco showed strength in all areas of People's Pension scorecard, which benchmarked all shortlisted managers, and looked for areas of excellence across seven key factors: performance, portfolio construction and execution, teams and resources, risk management, firmwide considerations, responsible investment, and partnership capabilities.

The update comes nine months after People’s Pension announced two new partnerships with Amundi and Invesco, which now manage developed markets equities and fixed income portfolios, respectively.

People's Pension trustee board chair, Mark Condron, said: “Today’s announcement is fantastic news for our seven million members as Robeco is committed to enabling us to deliver the very best returns.

"Forming strong partnerships – such as the one we are forging with Robeco – is central to our strategy. This development is consistent with our aim to deliver the very best returns to members with a best-in-class RI approach.”

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