Hermes Investment Management has been appointed to manage a $400 million global high yield credit investment mandate, the company has announced.
The $38 billion manager will run the Första AP-Fonden (AP1), one of the five buffer funds in the Swedish national income pension scheme.
The mandate was driven by a desire to improve the geographical diversification of high yield exposure, in the $39.59 billion (SEK 323 billion) fund.
ESG is a fundamental part of Hermes’ credit investment process, which allows them to draw on multiple sources of information including its ESG Dashboard reports on listed companies.
Commenting on the acquisition, Hermes’ co-heads of Credit, Fraser Lundie, and Mitch Reznick said: 'AP1 is one of the most innovative and forward-thinking pension funds. Our credit offering sits at the confluence of industry-leading credit management and a pioneering approach to ESG integration, which includes the pricing of ESG risks as well as analysis.
‘Clearly they, like us, believe that creditors have as much interest as shareholders in seeing companies’ ESG practices improve and that active engagement can facilitate those improvements.’