The Financial Committee of Sovereign Wealth Funds (FC) met for the third time this year on Wednesday, May 15th, 2019. On this opportunity, the FC members met with delegations from Mellon Investments Corporation (Mellon) and BlackRock Institutional Trust Company, N.A. (BlackRock), which are responsible for investing part of the Pension Reserve Fund (PRF) and Economic and Social Stabilization Fund (ESSF). These visits are part of the activities that external managers must perform to inform about their management.
Mellon, one of the PRF and ESSF equity portfolio managers, provided an overview of its organization, investment staff, and performance in 2018 and the first quarter of 2019. Additionally, the firm provided some general information about how environmental, social and governance (ESG) considerations could be incorporated into the investment processes.
BlackRock, responsible for managing part of the corporate fixed income, high yield bonds and equity portfolios in the PRF and also part of the equity portfolio in the ESSF, described its investment team and process, and, like Mellon, presented its performance in 2018 and in the first quarter of 2019. In addition, as requested by the Committee, Mellon provided additional information about the currency hedging strategy that could be used in the future for the fixed income portfolio, as part of the new PRF investment policy.
The FC members expressed their appreciation for the presentations and indicated their satisfaction with their work.
Finally, FC members preliminarily discussed the steps to be taken to respond the request of the Minister of Finance to analyze alternatives to incorporate ESG considerations in the investment process of the Chilean Sovereign Wealth Funds.
The FC—an external, independent committee—is made up of the following six experienced professionals and experts: Jose De Gregorio (Chairman), Cristian Eyzaguirre (Vice Chair), Ricardo Budinich, Jaime Casassus, Martín Costabal and Paulina Yazigi.