Border to Coast, one of the UK’s eight local authority pension asset pools, is set to launch a £1.3bn (€1.5bn) listed alternatives fund for investment by the 11 local government pension schemes it serves, it announced today.
It said the fund would hold listed securities that provide exposure to infrastructure, specialist real estate, private equity and alternative credit, complementing the existing £5.7bn private markets investment programme.
Border to Coast said the fund, which is scheduled to launch early next year, “will provide a key strategic building block for the partner funds’ long-term asset allocation to global alternatives, providing a liquid, diversified source of returns”.
It said the portfolio would be built around key long-term structural themes such as the green energy transition, data revolution, and urbanisation and direct investment towards the underlying assets that look set to benefit.
“The listed alternatives fund will give our partner funds access to a hugely diverse and cost-effective portfolio of alternative assets,” said Ryan Boothroyd, portfolio manager, at Border to Coast.
“We will take advantage of our long-term investment horizon by selecting high-quality investment opportunities that tap into themes we expect to shape the future, such as renewable energy generation and transmission, digital connectivity, and urbanisation.”
The fund aims to provide a net total return in excess of the MSCI All Country World Index over a rolling five-year period, with lower aggregate costs than traditional private alternative investments.
Border to Coast’s 11 client pension funds have some £55bn in assets between them. As at the end of March 2021, £24.7bn had been pooled.
Earlier this year Border to Coast said it was on track to deliver over £110m of cumulative net savings to them within the first decade of pooling, and over £250m in the first 15 years.