Investing for the long term
Our investment approach is shaped by the needs of our customers, our Partner Funds. They operate open-ended defined benefit pension schemes on behalf of 2,800 employers, representing more than 1.1 million people, and ultimately backed by local taxpayers. The invested assets are intended to fund pension payments for scheme members many years into the future – in some cases into the next century. Our Partner Funds’ focus is on generating consistent returns, with an emphasis on ensuring the sustainability of the fund and maintaining stable contribution rates for employers.
To deliver for our Partner Funds, we take a long-term approach to investment. We develop and operate innovative, cost-effective investment propositions that support our Partner Funds in implementing their strategic asset allocations. Gaining a deep understanding of the investments we make and the third parties we work with is crucial in managing these portfolios.
In particular, we believe that environmental, social and governance (ESG) issues can have a material impact on the value of financial assets and on the long-term performance of investment portfolios, and we believe strong and sustainable investment performance is delivered through robust portfolio risk, research, and responsible investment capabilities.
Our investment philosophy
Our philosophy can be summarised as:
- Active management adds value over the long term and enables better integration of ESG considerations
- Fully integrated and robust fundamental research provides the best means of generating superior long-term returns
- Engaging with companies as an active steward of assets, rather than excluding, is a better means of making a real difference and unlocking long-term value
- Costs are a headwind to investment performance and frequent changes in holdings or managers are detrimental to long-term returns
- Well managed businesses with strong governance, diverse Boards and a commitment to sustainability will be more resilient and more likely to generate superior financial return
- A commitment to reducing carbon emissions is essential to achieving long-term success – Border to Coast is committed to achieving net zero emissions across its investments by 2050 or sooner
We design, develop, and operate investment opportunities offering our Partner Funds exposure to equities, fixed income and private markets – and we are currently designing a real estate offering. Border to Coast is responsible for the management of these investments though our in-house investment team either directly or through selecting and working with specialist external managers.
Our equity investments provide our Partner Funds access to companies listed on public markets around the world. As an active steward of assets, we use our influence as a shareholder to engage with companies to drive real change and unlock value. Our in-house team is responsible for the management of all our equity funds, either directly, or through selecting specialist external managers who provide exposure to particular investment styles or regions.
Our fixed income investments provide our Partner Funds with a differentiated source of return to equities through government and corporate bonds, loans, debt, credit funds, and asset-backed securities. These investments are managed by our in-house team, either directly, or through the selection of external managers who provide exposure to specialist fixed income capabilities.
Private Markets encompasses a broad range of investment types and opportunities which includes specialist sectors or industries, such as private equity, infrastructure and private credit, which can be difficult to access through traditional public markets. Our specialist in-house team seeks to partner with a range of specialist external managers to develop a diversified, global portfolio which can offer enhanced risk-adjusted returns.
We provide a range of investment services, including:
- portfolio management: developing and managing a range of investment propositions to meet the long-term risk, return and liquidity, and income requirements of our Partner Funds;
- asset management services, including arranging custody and administration of assets;
- facilitating asset servicing support;
- investment reporting and accounting information;
- supporting Partner Funds on responsible investment (RI) and stewardship.