The Greater Manchester, Clwyd and South Yorkshire UK local authority funds have committed to a £60m (€83.7m) small and medium-sized enterprise (SME) development fund.
Launched by Foresight Group, it will target SMEs in the North West of England.
The fund has attracted £20m from the Greater Manchester Pension Fund (GMPF) – at £17.6bn, the UK’s largest local authority scheme – and an undisclosed amount from the South Yorkshire Pensions Authority and Clywd Pension Fund.
The fund will make private equity investments of up to £5m in businesses based in the English regions of Cheshire, Cumbria, Lancashire, Manchester, Merseyside, North East Wales and South Yorkshire.
Foresight will open an office in Manchester to oversee investments, which it said would be across all sectors and types of private equity.
Kieran Quinn, chairman at the GMPF, said: “This is an excellent example of local government pension schemes working collaboratively to generate commercial returns and provide a positive impact on the local economy.”
The GMPF has previously spoken of the challenges in maintaining its 5% target allocation to private equity due to the rate at rate at which the asset class recycles capital.
Bernard Fairman, chairman at Foresight, said the fund would seek to support a government initiative to revitalise growth in the UK’s North.
“The region,” he said, “has a large number of underfunded SMEs, particularly within the niche engineering and hi-tech manufacturing sectors, creating opportunities for the fund to stimulate growth, generate jobs and deliver healthy risk-adjusted returns to investors.”
Colin Everett, chief executive of Clwyd’s administering authority Flintshire County Council, added: “We are keen to collaborate with other local government pension schemes and believe this fund will provide a sustainable local economic impact along with commercial returns.”