BORDER TO COAST APPOINTS TWO SPECIALIST CHINA MANAGERS

Border to Coast Pensions Partnership (“Border to Coast”), one of the largest public sector pension pools in the UK, has appointed two specialist China equity managers (UBS Asset Management and FountainCap Research and Investment (Hong Kong) Co., Ltd_ to supplement its existing Emerging Market Equity Fund (which, subject to market conditions and additional Partner Fund investments is expected to increase to c.£900m).

Reflecting the increasing importance of China within emerging markets, Border to Coast is creating two separate sleeves within its Emerging Market Equity Fund – one for China to complement the internally managed sleeve.  It is expected that £300-500m will be allocated to the two managers, subject to market movements and the investment decisions of Border to Coasts’ eleven Partner Funds.

Daniel Booth, Chief Investment Officer from Border to Coast, said:

 “China is becoming increasingly important in the Emerging Markets benchmark, and we are very pleased to have selected two managers with local presence and specialist expertise to cover such a wide and diverse market. They will complement our ex-China mandate in our planned restructuring of our Emerging Markets fund early next year and we look forward to working closely with them to meet our Partner Funds’ return objectives.”

The two firms selected offer a diversified exposure to themes such as technological innovation, growing middle class, and energy transition.  UBS Asset Management has a long track record in selecting industry leaders with strong competitive advantages, whilst FountainCap utilises their coverage and local knowledge across China to uncover opportunities.

Rachel Perini, Executive Director, UK Client Coverage, of UBS Asset Management said:

“We are delighted to broaden our relationship with Border to Coast Pensions Partnership and extremely proud of our appointment as a China equity manager. Being awarded this mandate, following a detailed and rigorous due diligence process, is an endorsement of UBS Asset Management’s ongoing commitment to LGPS and recognition of our award-winning expertise. We look forward to our continued collaboration with the Border to Coast investment team and supporting their member funds over the long term.”

Frank Ding, Chairman and CIO of FountainCap said:

 “We are thrilled to be appointed as one of only two China equity managers and grateful to Border to Coast for this opportunity. Winning this mandate is not only a strong endorsement to our fundamental long-term investment strategy, investment process and execution capabilities, but it is also a vote of confidence that FountainCap can do even better in the future. We are excited to start this new partnership with Border to Coast and look forward to using our research and investment expertise in generating consistent superior long-term investment results for their China investments.”

Over 50 managers applied for a mandate and were assessed for technical quality, value for money and complementarity of fit. Significant emphasis was placed on the quality of the investment approach as well as the extent to which responsible investment factors were embedded in the investment process.

Subject to FCA approval the Fund is scheduled to be restructured in early 2021.