WFAM to manage Nest global corporate bond mandate

Following a recent tender, Nest has appointed Wells Fargo Asset Management (WFAM) to manage a segregated, global corporate bond mandate.

WFAM will immediately start to invest on behalf of Nest and its 8 million members, with the pension scheme aiming to invest around GBP500 million into global bonds over the course of the next 12 months.

Nest has been investing in the UK corporate bond market for a number of years but is looking to expand out further, taking advantage of the favourable and stable returns offered globally in this asset class.

Anders Lundgren, Nest’s Head of Public Markets and Investment Strategy, says: “This step is a natural progression for a scheme of Nest’s size and helps us to further develop our sophisticated investment strategy.

“The UK bond market has been a successful performer in our funds over the past few years. We’ve looked ahead and seen that there are further opportunities globally in this market, which is why we’re making this move.

“WFAM has managed credit for over 25 years, which means they have gone through multiple credit cycles - experience that’s hard to replicate. They have a dedicated ESG strategy team to ensure we can continue to generate sustained, long-term returns for our members.

“A segregated mandate gives us greater control over how our member’s money is invested, ensuring we adhere to our strong ESG criteria.”

The announcement by the UK’s largest auto enrolment pension scheme is a landmark appointment for WFAM, which is committing new, dedicated resources to the UK defined contribution market.  

Nico Marais, CEO of Wells Fargo Asset Management, says: “We are honoured that Nest has selected Wells Fargo Asset Management to manage its new global investment grade credit mandate.

“Our investment and research specialists look forward to harnessing the firm’s investment acumen, expertise on risk management, and integrated environmental, social and governance platform to help Nest and its members achieve their investment objectives.”

Almost 50 asset managers submitted bids to manage this mandate, from which WFAM has been appointed to run an active, segregated account with a currency hedge. The fund will be evergreen and able to scale up to meet the demands of the rapidly growing pension scheme which takes around GBP400 million a month in member contributions.