The £40bn Local Government Pension Scheme (LGPS) pool Border to Coast has announced the launch of two new investment strategies, offering its partner funds access to UK opportunities and climate solutions.
The launch of these new strategies comes as the pool reports an additional £3.6bn in commitments from its partner funds, growing its overall private markets allocation to £16bn, of which £12bn have been invested to date.
Joe McDonnell, CIO of Border to Coast, commented: “The success of our private markets programme to date is testament to the significant benefits pooling continues to bring to the table.
“Our collective scale and strong alignment with our partner funds’ needs has resulted in not only sizeable fee reductions and greater potential for attractive long-term returns, but also access to a broader range of global investments, the development of strategic partnerships with UK and global asset managers, and the ability to focus investment into areas such as climate solutions.”
Border to Coast announced the planned launch of its UK opportunities portfolio last year, the strategy has now been formally launched with an additional £500m of commitments to invest in UK productive finance assets.
Investments under consideration include new build housing, commercial properties and regeneration projects; renewable energy development and supporting grid infrastructure; and finance for early stage and growth companies in the UK.
The portfolio will focus on “additionality”, financing new projects offering attractive investment returns, that are also expected to add value to the local and wider UK economy, Border to Coast said.
The climate opportunities portfolio has received £1.2bn in new commitments. It will invest in a large battery storage system in South Wales and a green hydrogen platform producing cleaner energy for industrial use including sustainable aviation fuel and steel manufacturing.
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