Border to Coast launches £700 million EM equity fund

Border to Coast Pensions Partnership has selected four specialist managers to support a new £700 million Emerging Markets Equity Alpha Fund on behalf of its partner funds.

Goldman Sachs Asset Management and Baillie Gifford have been chosen to manage an emerging markets ex-China equity sleeve, equal to about two-thirds of the fund. They will join UBS and FountainCap, which jointly manage a dedicated China equity sleeve, making up around a third of the portfolio. The proposition will complement Border to Coast’s existing internally managed emerging markets proposition.

Net zero by 2050 or sooner, environmental, social, and governance (ESG) and climate change considerations were a fundamental part of the selection process, in addition to understanding each manager’s approach to active engagement.

The fund’s carbon impact is expected to be considerably below its benchmark at launch, with analysis suggesting its financed emissions will be between 30% to 50% lower.

Graham Long, head of external management, Border to Coast, said: “Our selected managers have an extensive presence in emerging markets, and we believe this specialisation – amplified by how we have structured the fund – strengthens our partner funds’ access to investment opportunities that deliver sustainable, long-term risk-adjusted returns.