Border to Coast Pensions Partnership, one of the UK’s largest public sector pension pools, has added a further £1.2bn (€1.4bn) to its private market investments.
The move is part of a £2.7bn private markets programme announced in summer of 2021 and have been deployed across a range of new infrastructure, private equity, and private credit funds.
Mark Lyon, head of internal management, said: “We continue to build portfolios that are diversified across strategies, geographies, sectors and size. Particular focus has been given to building strong, long-term relationships with managers.”
He said the portfolio incorporates a “strong mix of high-quality established managers that can often be difficult to access”, alongside sector specialists and emerging managers with differentiated offerings.
“Wherever possible, we’ve sought to lower fees and drive value for money for our partner funds through our scale, early engagement, co-investments and being considered a long-term partner,” Lyon said, adding that investing in private markets is an effective way for Border to Coast’s partner funds to diversify their investments, generate stable cash flows, and benefit from long-term capital growth.
The investments include £593m to four infrastructure funds, £426m to four private equity funds, and £148m to one private credit fund.
Border to Coast’s private markets programme, which was first launched in mid-2019, was designed to offer its 11 Local Government Pension Scheme (LGPS) partner funds access to a wider range of investments, including co-investments, with the aim of providing enhanced, diversified, risk-adjusted returns, the pool stated.
As per its programme, the first two tranches, Series 1A and 1B, saw a respective £1.8bn and £1.2bn invested into private markets – with the commitments for 1C taking the total assets within the Border to Coast private markets programme to £5.7bn.
KKR Diversified Core Infrastructure Fund ($275m): the fund will focus on investing in critical core infrastructure predominantly in North America and western Europe;
Stonepeak Asia Infrastructure Fund ($210m): the fund will invest in infrastructure assets across Asia within the communications, transport and logistics, and energy transition sectors;
Meridiam Sustainable Infrastructure Europe IV (€100m): the fund will invest in Europe across the three key themes of mobility (movement of people and goods), energy and transition, and environmental and social infrastructure;
Digital Colony Partners II ($210m): the fund will target investments in cell towers, data centres and fibre broadband networks globally.
Strategic Value Special Situations Fund V ($130m): the fund will look for opportunities where it can be actively involved in the financial restructuring and subsequent operational improvement of companies;
Insight Partners XII ($140m): it will focus on providing strategic and operational support to accelerate growth in software, software-enabled services, and internet companies predominantly in the US;
HarbourVest Co-Investment Fund VI ($180m): the fund is a co-investment programme investing alongside high-quality GPs in buyout and growth equity transactions;
Baring Asia VIII ($140m): it will make Asia-focused buyout and control investments with a focus on operational improvements.
Ares Senior Direct Lending II ($208m): the fund has a first line strategy targeting middle and upper middle market companies in the US.
Based in Leeds, Border to Coast’s combined assets total around £55bn. It offers its 11 partner funds investment opportunities across equities, fixed income and private markets.