Border to Coast Pensions Partnership has launched a £1.5bn (€1.7bn) sterling index-linked bond fund, its first fixed income fund directly managed by the asset pooling collaboration.

The transition to an internally managed fund allows Border to Coast to generate aggregate cost savings for the investors, the asset manager said.

Durham, North Yorkshire and South Yorkshire are the initial public pension schemes in the pool that are allocating to the fund, which will invest in sterling-denominated index linked Gilts and investment grade corporate bonds.

“The launch of our Sterling Index Linked Bond Fund demonstrates the skills and capabilities within Border to Coast to deliver effective investment solutions to our partner funds,” said Mark Lyon, head of internal management at Border to Coast.

“The importance of this fund is highlighted by the sizeable initial commitments received from Durham, North Yorkshire and South Yorkshire who have supported us in the development and launch despite the challenges of the COVID pandemic.”

Councillor Mick Stowe, chair of the South Yorkshire Pension Authority, said: “Border to Coast is perhaps unique in the way it involves its customers in the development and design of cost-effective investment options across a wide variety of asset classes. We’d like to thank the team in how they have worked with us in designing this fund – which is a key part to allow us to deliver our long-term investment strategy.”

Transition management services were provided by BlackRock, with Inalytics acting as transition advisor.

Border to Coast is owned by 11 local government pension schemes with combined assets of around £46bn.

Looking for IPE’s latest magazine? Read the digital edition here.