BORDER TO COAST DEMONSTRATES COST SAVINGS AND STRENGTHENED RESPONSIBLE INVESTMENT IN FOURTH ANNUAL REPORT AS POOLED ASSETS HIT £47BN
Posted on July 21st, 2022
- Significant progress made with £47bn of Partner Fund assets now pooled, of which Border to Coast is responsible for managing £38.3bn.
- Delivered innovative and cost-effective propositions for Partner Funds while securing £14m of savings in 2021/22.
- Further strengthened its influence as a responsible investor and demonstrated its commitment to supporting the global transition to Net Zero.
Border to Coast Pensions Partnership (“Border to Coast”) has published its fourth Annual Report and Accounts, setting out the progress achieved on pooling and the benefits delivered for the Local Government Pension Scheme (LGPS) in 2021/22.
The 11 LGPS funds which own Border to Coast (it’s “Partner Funds”) have pooled nearly 80% (£47bn) of their collective c.£60bn of assets at 31 March 2022, demonstrating the clear commitment to pooling and the added value it delivers.
Border to Coast is responsible for the management of £38.3bn of the total pooled assets, an increase of £13.6bn in the year, and is providing advice and support on a further £8.7bn pooled by its Partner Funds through passive index funds.
Expanding long-term investment opportunities
The report highlights the continued development of investment opportunities to enable further pooling of LGPS assets. In the year, Border to Coast launched an innovative £3.5bn Multi-Asset Credit Fund and a £1.4bn Listed Alternatives Fund.
It also continued to expand its Private Markets programme, with a further £4.1bn in commitments from Partner Funds taking the total programme to c.£10bn, marking Border to Coast’s progress as a significant institutional investor. It continues to maximise the benefits of scale provided by pooling to explore new investment opportunities and drive improvements in ESG reporting, and it has secured a c.24% reduction in fees across the asset class to date on behalf of Partner Funds.
Delivering cost savings and good governance
Border to Coast continued to deliver cost savings for its Partner Funds, a major Government objective for pooling, with £14m of savings generated during the year. It remains on track to deliver £110m of cumulative net savings within the first 10 years of pooling and £250m in the first 15 years.
Strong governance is fundamental to building a sustainable organisation – and in the year Border to Coast’s commitment to embedding transparency, integrity, and accountability into its framework was recognised with a Good Governance Award at the annual LAPF Investment Awards.
Embedding responsible investment
Border to Coast also continued to deliver on its commitment to responsible investment, setting out its approach to climate change during the year and pledging to achieve net zero carbon emissions by 2050 or sooner. To support this goal, it launched a£1.35bn Climate Opportunities investment proposition within its Private Markets programme, targeting investment to drive the global transition to low carbon economies.
It further developed its influence as a responsible investor and an active steward of Partner Fund assets, being accepted as a signatory to the UK Stewardship Code and further strengthening its voting stance on both climate change and diversity.
Chris Hitchen, Chair of Border to Coast, said: “Despite the backdrop of another year disrupted by Covid-19, I am proud and impressed at how colleagues at Border to Coast, our Partner Funds, and our strategic partners have worked together to maintain our progress in delivering savings and unlocking new investment opportunities for its Partner Funds.
“We have come a long way in just four years and while the environment we will operate in will evolve, whether due to changing economic conditions, new Government legislation, or implementation of sustainability goals, we will support our Partner Funds on the journey every step of the way.”
Rachel Elwell, CEO at Border to Coast, said: “Working with our Partner Funds, we continue to demonstrate how our collective approach to pooling is unlocking benefits for the LGPS. Of our Partner Funds’ £60bn of assets, £47bn have now been pooled and I firmly believe there is significant potential to deliver further value for the LGPS in the years ahead.
“The collective scale achieved through pooling gives our Partner Funds an influential voice that has a real impact. Together, we have a stronger voice as a responsible investor and active steward of assets as well as within the investment industry itself.
“We have made great strides in delivering the initial intentions of pooling and demonstrating the added value it can deliver, but there is further work to be done. I look forward to working with our partners and stakeholders as we continue to seek to make a difference for the LGPS over the long term.”
The Annual Report & Accounts 2021/2022 can be found here.Back to all News & Insights