- Border to Coast launches UK Real Estate Fund, broadening LGPS (Local Government Pension Scheme) Partner Fund access to new investment opportunities.
- Set to rank among the top ten largest UK real estate funds, it aims to provide cost-effective access to high-quality UK assets offering long-term, durable income and stable returns.
- Three LGPS Partner Funds pool assets of £1.2bn at launch, unlocking the benefits of scale including strengthening responsible investment implementation, and diversifying risk while supporting greater UK investment.
Border to Coast today announces the launch of a direct UK real estate investment proposition, working with its LGPS Partner Funds to unlock access to new investment opportunities in the sector.
Three Partner Funds – Tyne and Wear Pension Fund, Cumbria Pension Fund, and South Yorkshire Pensions Authority – have collaborated to pool 65 existing holdings to seed the proposition at launch.
Demonstrating the benefits of scale gained by pooling, the proposition offers cost-effective access to high-quality assets and new real estate sectors, diversifies risk and strengthens the implementation of responsible investment for Partner Funds.
Joe McDonnell, Chief Investment Officer, Border to Coast, said: “The launch of UK Real Estate is testament to the progress our partnership has made to date. It is a sophisticated proposition that draws on the benefits of scale to unlock greater access to quality, long-term investment opportunities in the UK for Partner Funds. That same scale has enabled us to build a dedicated and highly skilled in-house team with years of experience in the UK real estate market to support Partner Funds. The depth of expertise we have at Border to Coast coupled with the ongoing support of Partner Funds enables us to launch propositions that truly make a difference for the LGPS.”
Properties at launch include offices, retail, care homes, student accommodation and industrial and warehouse facilities across 26 UK counties. With the proposition expected to more than double in size to more than £3bn in the next five years, it will support greater LGPS investment into the UK. It will seek to target investment in new sectors including life sciences and residential such as affordable housing, helping support ambitions to invest and power up UK economic growth.
“Border to Coast’s UK Real Estate fund launch is the direct result of the significant commitment and support from Partner Funds. All our service provider partners have delivered major detailed due diligence to underpin the governance needed to bring this pooled fund into being and open up access to the wide opportunity set for long-term durable returns on offer within the UK real estate market. The Border to Coast team will embrace both the opportunity and responsibility to deliver for our Partner Funds.” Alistair Smith, Head of Real Estate, Border to Coast
To date, Partner Funds have, through Border to Coast investment vehicles, invested more than £10bn in the UK via listed and private markets.
George Graham, Director, South Yorkshire Pensions Authority, said: “The launch of the UK Real Estate Fund is a prime example of the benefits of collaboration and scale that pooling can provide LGPS funds. The creation of such a large fund, dedicated to investing in the UK, provides Partner Funds with access to a significant investment capability that has not previously been available to many, as well as access to assets of a type which would not have been available to Partner Funds acting alone.”
Councillor Doug Rathbone, Chair, Cumbria Pensions Committee: “The Cumbria Pension Fund has successfully invested in UK property for many years. To enhance that investment, it has taken the decision to transfer the majority of its UK property into the newly launched UK Real Estate proposition from Border to Coast. This enables us to have greater access to high quality investment opportunities than we might have been afforded alone, as well as benefit from the experience developed in the Border to Coast team. We have been working with other Partner Funds and the Border to Coast team to develop this proposition and are pleased to be one of the founder investors in this asset. It is a great example of how Border to Coast works collaboratively to develop its investment propositions to meet the investment needs of its Partner Funds.”
Border to Coast holds responsibility for the strategic direction of the proposition. It has appointed abrdn as investment advisor and to implement the strategy at portfolio level. Workman has been appointed property manager. The proposition targets a return of UK CPI +4% over rolling 10 year periods (net of all fees and expenses).
Cameron Murray, Head of UK and European Real Estate at abrdn, said: “We are proud to have been appointed to support this incredibly important mandate and look forward to partnering with Border to Coast to deliver the objectives of the Partner Funds. We are keen to enhance the base portfolio, utilising the skills of our dedicated Transactions Team in order to identify the best opportunities in the market, with a wider opportunity-set now available through the efficiencies of scale and an aligned approach to responsible investment.”
The launch of the UK Real Estate Fund follows the launch of two Global Real Estate Funds (Global Core and Global Value-Add) with £870m of commitments in December 2023.
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