The Leeds-based Border to Coast Pensions Partnership, which manages about £55bn (€63.9bn) of assets, is seeking to appoint one or potentially two external managers to its £1.5bn UK Listed Equity Alpha Fund.
The move, the Partnership claims, follows strong performance and new inflows.
Graham Long, head of external management at Border to Coast, said: “Since its launch to the end of March 2021 the fund has outperformed its benchmark by over 4.5% per annum. To build on this success we would like to appoint a long-term strategic partner who shares our vision and commitment to responsible and sustainable investment.”
The UK Listed Equity Alpha Fund was launched in December 2018 to give partner funds exposure to UK equities through three complementary investment strategies currently managed by Baillie Gifford, Janus Henderson and UBS Asset Management.
To ensure the portfolio is well positioned for future risks and opportunities, Border to Coast is launching a search for additional managers, it announced.
Up to two managers, with a strong focus on quality and value investing, may be appointed, it added. The mandate size will be up to £500m.
“We expect our managers to integrate ESG considerations throughout their investment process including a strong understanding of the management of climate risk,” Long said, adding that the overall fund’s carbon footprint is significantly lower than the benchmark and expects it to remain the same.
The fund is seeking to achieve a long-term return 2% per annum ahead of the FTSE All Share index after deduction of manager fees.
Border to Coast – which is one of the eight pools managing the assets of UK local government pension schemes (LGPS) – has produced an online presentation for managers interested in bidding for the mandate that provides further background and information on the selection process.
The formal tender process was launched on 8 June and managers are likely to be appointed in the autumn, it said. The appointment process is being supported by Mercer, which will respond to any queries from managers via email.