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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.

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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.”

The GMPF’s £20m investment comes shortly after its £500m infrastructure joint venture with the London Pensions Fund Authority made its first investment, committing to a biomass fund

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