Border to Coast launches alpha fund

December, 2019 Print

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Border to Coast Pensions Partnership, one of the largest UK public sector pension pools with assets worth £45 billion, has launched its global equity alpha fund, with assets of £5 billion. This brings Border to Coast’s assets under management to approximately £15 billion, excluding commitments to private markets of £1.8 billion that are currently being placed.

Graham Long, head of external investment at Border to Coast, said: “The fund aims to combine the highest quality, best value investment managers into a coherent portfolio where the outcome is greater than the sum of the parts.”

Doug McMurdo, chair of the Border to Coast Joint Committee and of Bedfordshire Pension Fund, said: “It is paramount that sub-funds are made available to the 12 partner funds in line with the agreed strategy, in order that the identified benefits from economies of scale can be realised.”

Following the appointment of Harris Associates, Investec Asset Management, Lindsell Train and Loomis Sayles as managers of the Border to Coast global equity alpha fund in June, the pool has now successfully launched the fund.

Eight out of 12 of the partner funds invested at launch, with assets from 14 mandates across both segregated and pooled vehicles being transferred to the fund. The restructuring of the assets to the target portfolios of the selected external managers has now been completed with the support of BlackRock and Inalytics as the transition manager and adviser.

The competitive manager selection and economies of scale will result in aggregate annual management fee savings to partner funds of £3.5 million per year. The investment fund seeks to achieve a long-term return 2% pa, ahead of the MSCI All Country World Index after deduction of manager fees.

“This is our largest fund launch to date,” said Chris Hitchen, chair of Border to Coast, adding that all investing partner funds, BlackRock and Inalytics have “worked together very effectively to deliver the launch to plan.”

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