Border to Coast delivers benefits of pensions pooling with a further £1.7bn of private market investments for LGPS partner funds

6 October 2023

• Border to Coast confirms a further £1.7bn investments in its private markets programme during 22/23
• This includes £350m under the Pool’s ‘Climate Opportunities’ proposition, which is delivering investment to drive the transition to Net Zero
• The scale of investments is resulting in significant cost reductions – c. 26% reduction in headline fees to date

Border to Coast Pensions Partnership (“Border to Coast”) has confirmed c.£1.7bn (subject to currency fluctuations) of new investments in its £12bn private markets programme, with commitments in private equity (c.£261m), infrastructure (c.£502m), private credit (c.£486m), and climate opportunities (c.£452m).

Border to Coast’s innovative £12bn private markets programme is integral to its delivery of cost-effective access to a wider range of investments on behalf of its 11 LGPS (Local Government Pensions Scheme) Partner Funds, which have assets totalling c.£60bn.

These most recent commitments by Border to Coast include delivering investments into:

• the energy transition and supporting investments that further decarbonisation goals
• the digital revolution and assets to support growth in data and digital communication
  growth opportunities in emerging markets.

Mark Lyon, Deputy Chief Investment Officer, Border to Coast: “As a large and sophisticated investor, we are securing high quality and cost-effective investment opportunities for our Partner Funds. These have the potential to offer enhanced long-term investment returns while reducing costs.”

£350m of the new investments are part of ‘Climate Opportunities’, which targets attractive returns via investments seeking to have a material positive impact on climate change and support net zero carbon emission goals. Commitments include a UK focused strategy targeting assets which support the net zero transition including greenfield renewables power generation, grid infrastructure and storage assets.

The programme is also delivering investment into a range of growth assets. This includes a co-investment into one of the largest co-located solar and battery energy storage systems projects in the world, Edwards Sandborn which, once completed, will deliver 1,300 MW and displace more than 320,000 tons of CO2 emissions annually.

Ian Sandiford, Head of Investments (Alternatives), Border to Coast, said: “Climate Opportunities is an innovative investment strategy which is delivering significant investment to enable the energy transition to net zero, supporting both our Partner Funds’ investment strategies and our own commitment to Net Zero.”

The scale of investments has enabled significant cost reductions – with total estimated cost savings to date being c. 0.4% p.a. (c. 26% reduction in headline fees), aggregated across all strategies.

These £1.7bn investments conclude the £4bn ‘Series 2A’ private markets programme first announced in April 2022; in December 2022 Border to Coast confirmed the initial £2.2bn of investments of this strategy.

Source: Border to Coast Pension Partnership