Border to Coast Pensions Partnership, which has direct responsibility for £40.3bn of assets, has launched a new £700m Emerging Markets Equity Alpha Fund.
The Local Government Pension Scheme (LGPS) pool stated that two-thirds of the fund will be focused on emerging markets ex-China equity mandates, whilst the remaining third will be concentrated on China equity mandates.
Border to Coast has chosen Goldman Sachs Asset Management and Baillie Gifford to manage the ex-China equity mandates portion of the fund, with UBS and FountainCap managing the remainder of the portfolio.
LGPS funds which are currently participating in the pooling vehicle’s fund are Durham, Surrey and Tyne and Wear.
Graham Lond, Border to Coast’s head of external management, said: “The extensive experience of our selected managers in emerging markets and responsible investment, along with the way we have structured the fund, strengthens our partner funds’ access to investment opportunities that deliver sustainable, long-term risk-adjusted returns.”
Border to Coast stated that the fund seeks to outperform the MSCI Emerging Markets Index by at least 2% a year over rolling three-year periods.
The pool added that the carbon impact of the Emerging Markets Equity Alpha Fund is expected to be considerably below its benchmark at launch, with analysis (at 31 March 2022) suggesting its financed emissions will be between 30% to 50% lower.
The fund builds on Border to Coast’s existing £1.2bn Emerging Market Equity Fund, which was launched in 2018 and blends internal management with an externally managed China sleeve.
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