The Border to Coast LGPS pension pool is preparing to launch a £1bn emerging markets fund that will provide partner funds with access to some of the world’s fastest-growing economies.
The Emerging Markets Equity Alpha Fund is expected to launch in the first half of 2023. Once launched, it will seek to outperform the MSCI Emerging Markets Index by at least 2% a year (net of fees) over rolling three-year periods.
Border to Coast is seeking two external equity managers to manage around £650m of the fund. They will join two China specialist managers who have already been appointed.
“Emerging markets are very diverse, and this year we have seen first hand how polarised individual market performance can be. We are therefore expecting successful managers to be experts in both bottom-up stock selection and country risk analysis,” said Graham Long, Border to Coast’s head of external management.
“Importantly, we want to partner with managers that have fully integrated ESG risk factors, including climate change considerations, into their investment process, reflecting our own beliefs in responsible investment and active stewardship.”
Border to Coast is one of the largest of the LGPS pension pools, with 11 partner funds and combined assets of £55bn.
A formal tender process to select the managers is due to be launched on 4 May 2022, with the successful managers expected to be appointed in the second half of 2022.
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