Wellington Management Wins $4.6 Billion Emerging Markets Mandate from Nest to Strengthen ESG Approach

UK pension scheme Nest announced that it has awarded investment manager Wellington Management with a £3.5 billion (USD$4.6 billion) mandate to manage its emerging markets equity strategy, in a move aimed at strengthening the strategy’s ESG risk evaluation and stewardship.

According to Nest, the move marks a significant shift in its approach to its emerging markets equity allocation, shifting to an active, fundamental, discretionary approach, which it said will allow for more selective investment in companies with robust ESG practices and strong growth potential.

The strategy will move from its current systematic approach, holding around 1,000 stocks, to a portfolio of between 100 and 150 stocks, enabling deeper engagement with portfolio companies, while continuing to provide broad diversification across countries and sectors, Nest added.

Rachel Farrell, Director of Public and Private Markets at Nest Invest, said:

“We’re excited to partner with Wellington, which puts engagement to the centre of its investment philosophy. Its focus on high-quality companies with strong governance in emerging markets shows a clear, strong alignment with Nest’s long-term investment goals and beliefs.”

Among the attributes highlighted in announcing its decision, Nest noted Wellington’s engagement approach in its fundamental research process, adding that the asset manager “seeks to understand how management approaches financially-material sustainability issues and assesses both responsiveness to feedback and willingness to improve.”

Aisling Freiheit, Head of EMEA at Wellington Management, said:

“We are delighted to partner with Nest on this important mandate. Nest is one of the UK’s leading pension schemes, with a clear commitment to delivering strong long-term outcomes for its members, and we are proud to support that mission.”