Border to Coast Pensions Partnership has launched the second phase 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. More than £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 (around £860m), private equity (around £600m), and private credit (around £850m).
Funds participating in Series 2B are the LGPS for Bedfordshire, Cumbria, Durham, East Riding, North Yorkshire, South Yorkshire, Surrey, Teesside, Tyne and Wear, and Warwickshire.
Border to Coast’s intention, via its private markets strategy, is 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.”
He added that 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 strategy is to actively manage assets to achieve value creation, 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 fund which targets investments with the potential to make a material positive impact on climate change and support net zero carbon emission goals.