Border to Coast launches new £2.3bn private markets programme

26 April 2023

  • £2.3bn of new commitments will focus on diverse opportunities across infrastructure, private equity and private credit
  • Launch brings total size of Border to Coast’s Private Markets programme to £12bn; £9bn of previous commitments have now been deployed
  • Leveraging the scale offered by pooling secures specialist, cost-effective exposure to the long-term opportunity on offer in private markets

Border to Coast Pensions Partnership (Border to Coast) has launched the next stage (“Series 2B”) of its Private Markets programme, with £2.3bn of commitments from its Local Government Pension Scheme (LGPS) Partner Funds.

The latest commitments take the total size of Border to Coast’s Private Markets programme, first launched in 2019, to £12bn. Over £9bn of previous commitments have now been deployed.

The new £2.3bn of commitments are the second phase (“Series 2B”) of the three-year ‘Series 2’ programme, which launched in April last year. Partner Fund commitments will be invested over the next year in infrastructure (c.£860m), private equity (c.£600m) and private credit (c.£850m).

The Private Markets programme is designed to broaden Partner Funds’ access to a wide range of investment opportunities, including via co-investments, with the aim of providing enhanced, diversified, risk-adjusted returns for the long term.

Ian Sandiford, Head of Alternatives at Border to Coast, said: “Due to our collective scale and dedicated investment team, we have been able to expand our Partner Funds’ long-term access to private market investing, secure access to quality managers and investment strategies, drive value for money and fee reductions, increasing the potential for enhanced long-term returns.”

This next tranche will seek investments globally across a range of investment themes including software and healthcare, the energy transition, and the digital and data revolution. The focus remains managers with value creation strategies based on operational improvements, rather than a reliance on leverage to generate returns.

Joe McDonnell, Chief Investment Officer at Border to Coast, said: “Private Markets is a key area for our Partner Funds. Having deployed £9bn in just four years, this new commitment highlights their confidence in our in-house team to find appropriate investment opportunities in this specialist asset class.”

Border to Coast has a strong focus on incorporating ESG and responsible investment into the investment process and works with the industry to enhance standards in this area.

Series 1 of Border to Coast’s Private Markets Programme contained three one-year tranches – 1A (£1.2bn), 1B (£1.8bn) and 1C (£2.7bn). In April 2022, Series 2 was launched with initial commitments of £4bn, which included the innovative £1.35bn Climate Opportunities offering; this targets investments with the potential to have a material positive impact on climate change and support net zero carbon emission goals.

Funds participating in Series 2B of the Private Markets programme are Bedfordshire, Cumbria, Durham, East Riding, North Yorkshire, South Yorkshire, Surrey, Teesside, Tyne and Wear and Warwickshire.

Source: Border to Coast
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