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Border to Coast launches £4bn Private Markets programme with dedicated Climate Opportunities offering

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  • Further £4bn of commitments takes value of Border to Coast’s total Private Markets programme to £10bn.
  • Second programme (“Series Two”) includes a dedicated £1.35bn Climate Opportunities offering to support the transition to a low carbon economy.
  • Expands access to investment opportunities with the potential for enhanced long-term returns for Border to Coast’s 11 local authority Partner Funds.

Border to Coast Pensions Partnership (“Border to Coast”) has launched its second Private Markets programme (“Series 2”) with £4bn of commitments from its Partner Funds, bringing total commitments in the programme to date to £10bn.

The first tranche of Series 2 commitments will be invested over the next year in infrastructure (£1.03bn), private equity (£705m), and in private credit (£985m).

It also includes a £1.35bn Climate Opportunities offering. This will be invested over a three-year period and will target investments that will have a material positive impact on climate change and support long-term net zero carbon emission goals. It will include investments across private equity, infrastructure and private credit, and will focus on the following sectors:

Clean energy: renewable energy generation; green hydrogen; battery storage; next generation electricity grids.

Technology: energy management; climate modelling; emissions tracking.

Transport: electric vehicles; local carbon fuels; charging points.

Industry: low carbon cement and steel production; automation; next generation plastics.

Agriculture: sustainable food production; alternative proteins; biodiversity; water management.

Carbon sequestration: technology to capture and store carbon; forestry.

In September 2021, Border to Coast announced its commitment to achieving net-zero greenhouse gas emissions across its investment portfolios by 2050 or sooner. This commitment included creating and evolving investment propositions aligned with net zero emissions by 2050 and facilitating increased investment in climate transition solutions. The Climate Opportunities offering forms one part of our long-term plan to achieve this goal.

“We have worked closely with our Partner Funds to design and launch innovative investments that enable them to deliver their long-term investment strategies. Our private markets programme is highly valued by our Partner Funds and is a key part of our offering. The addition of a Climate Opportunities offering continues to meet the need for enhanced long-term returns while helping drive the essential transition to a low-carbon economy and supporting efforts to combat climate change.”

Mark Lyon, Head of Internal Management at Border to Coast

First launched in May 2019, Border to Coast’s Private Markets programme is designed to offer its LGPS Partner Funds access to a wider range of investments, including via co-investments, with the aim of providing enhanced, diversified, risk-adjusted returns.

Investments are selected using a robust investment process, focusing on investment and operational due diligence and portfolio construction, which is undertaken by the internal Border to Coast team supported by third-party service providers.

An integral part of this process is a strong focus on how managers incorporate ESG and responsible investment considerations into their investment process. We continue to work with the industry to enhance standards in this area. Series 1 contained three one-year tranches – 1A (£1.2bn), 1B (£1.8bn) and 1C (£2.7bn). The new commitments takes the programme to £9.7bn.

Funds participating in Series 2 are Bedfordshire, Cumbria, Durham, East Riding, North Yorkshire, Surrey, South Yorkshire, Teesside, Tyne & Wear and Warwickshire.

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