• AXA Investment Managers has launched a UK domiciled global core credit fund with a formal net zero decarbonization objective, seeded by LifeSight with up to £1bn ($1.27bn) expected by 2027.
• The fund adopts the UK’s SDR Sustainability Improvers label, aligning pension capital with issuers on credible net-zero pathways while maintaining broad global credit exposure.
• The launch highlights growing demand from defined contribution schemes for climate-integrated credit strategies in late-stage accumulation and decumulation.

AXA Investment Managers has launched a global core credit fund explicitly designed to align pension capital with the transition to net zero, with Willis Towers Watson’s LifeSight DC master trust committing substantial seed capital that could reach £1bn ($1.27bn) by 2027. The move places climate risk and decarbonisation objectives at the centre of a core fixed-income allocation, rather than treating sustainability as an overlay.

The AXA Carbon Transition Global Core Credit Fund is UK-domiciled and targets long-term income and capital returns while investing across global credit markets. It is designed for pension investors seeking diversified exposure, but with a tighter focus on issuers demonstrating credible plans to reach net-zero carbon emissions by 2050 or those actively reducing carbon intensity on a defined pathway.

A core credit strategy built around transition risk

AXA IM positions the fund as a core building block for defined contribution schemes, particularly for members in later-stage accumulation and decumulation, where capital preservation, income stability, and risk management become more acute. Climate risk is treated as a financial risk, integrated directly into issuer selection rather than addressed through exclusions alone.

The fund has adopted the UK Sustainability Disclosure Requirements Sustainability Improvers label, making it the fifth fund in AXA IM’s SDR Improver range. The label signals a strategy focused on supporting measurable improvements in sustainability performance over time, an approach that aligns with UK regulatory expectations for transition-oriented investment products.

LifeSight anchors the launch

LifeSight’s initial investment of £400m ($508m) provides the fund with immediate scale, with allocations expected to grow to around £1bn by 2027. For one of the UK’s largest DC master trusts, the allocation reflects a broader shift toward embedding climate considerations into default strategies without sacrificing diversification.

Andrew Doyle, Lead Investment Adviser to LifeSight, said the partnership was driven by a focus on member outcomes. “We are proud to have consistently been one of the top performing master trusts in recent years, and are constantly looking for ways to further improve member outcomes,” he said. “We are therefore delighted to have partnered with AXA IM to access global credit markets.”

He added that the strategy would be used for members in the default during later-stage accumulation and decumulation. “It will help manage risk for these individuals during these important stages by providing valuable geographic diversification and through incorporating climate risk. We believe this will continue to improve on the strong outcomes we have achieved to date for our members.”

DC demand reshapes fixed income design

For AXA IM, the fund reflects a broader evolution in DC investing, where traditional buy-and-maintain credit strategies are increasingly being adapted to incorporate sustainability and transition considerations.

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Herschel Pant, Head of Global Consultants and UK Institutional at AXA Investment Managers, said large DC clients were continuing to allocate capital to the firm’s strategies. “We are delighted that large DC clients continue to trust us with their members’ capital and invest in strategies with us over 2025,” he said. “Our range of building blocks for DC clients in late stage of accumulation and decumulation continues to grow.”

Pant pointed to demand across buy and maintain, short-duration credit, and equity protection strategies, all developed with DC investors in mind. “We look forward to working closely with our DC clients as their needs evolve over time,” he said.

Scaling transition finance through credit markets

The launch also highlights how large asset managers are using public credit markets to support decarbonisation, particularly for issuers that may not yet meet strict green or impact thresholds but are moving in that direction.

Lionel Pernias, Head of Fixed Income Investment Solutions at AXA Investment Managers, framed the fund as part of AXA IM’s broader responsible investment strategy. “As a global leader in responsible investing, AXA IM is committed to accelerating the transition to a net zero world,” he said. “With over £250bn in buy and maintain credit assets, our growth is a result of our constant innovation.”

He added that the partnership with LifeSight demonstrated how sustainability objectives are increasingly embedded into mainstream pension solutions. “Working with LifeSight to launch a carbon transition credit product showcases AXA IM’s continued innovation in the DC pension and sustainability space.”

As regulators, trustees, and members place greater scrutiny on how pension capital is exposed to climate risk, the fund’s launch underscores a growing convergence between fiduciary duty, regulatory alignment, and the financing of the global carbon transition through core fixed-income markets.

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