BORDER TO COAST LAUNCHES £700M EMERGING MARKETS EQUITY ALPHA FUND
Posted on August 9th, 2023
- Fund launch broadens Partner Fund access to diverse global growth opportunities
- Benefits of pooling leveraged for Partner Funds through cost-effective access to specialist emerging market equity managers
- Fund seeks to outperform the MSCI Emerging Markets Index by at least 2% a year*
Border to Coast Pensions Partnership, the largest UK Local Government Pension Scheme (LGPS) pool, has launched a new £700m Emerging Markets Equity Alpha Fund on behalf of its Partner Funds.
The new fund complements Border to Coast’s existing internally managed Emerging Markets proposition and broadens Partner Fund access to the diverse growth opportunities in emerging market economies.
Using the benefits of its collective scale, Border to Coast has secured cost-effective access to highly specialised, experienced managers for its Partner Funds. Goldman Sachs Asset Management and Baillie Gifford were chosen to manage Emerging Markets ex-China equity mandates accounting for around two-thirds of the fund. UBS and FountainCap will each manage dedicated China equity mandates, making up around a third of the portfolio.
As a responsible investor committed to achieving Net Zero by 2050 or sooner, integration of environmental, social, and governance (ESG) factors are fundamental to Border to Coast’s investment approach. Border to Coast supports a Just Transition, recognising the challenges for Emerging Markets in making the transition to a low carbon economy and engages with our investee holdings and other stakeholders. The carbon impact of the Emerging Markets Equity Alpha Fund is expected to be considerably below its benchmark at launch, with analysis (as at 31 March 2022) suggesting its financed emissions will be between 30% to 50% lower.
Funds participating in the emerging market equity alpha fund are: Durham, Surrey and Tyne and Wear.
*The fund seeks to outperform the MSCI Emerging Markets Index by at least 2% a year (net of fees) over rolling three-year periods.
“This new fund demonstrates our responsiveness to the needs and ambitions of our Partner Funds.
“The extensive experience of our selected managers in emerging markets and responsible investment, along with the way we have structured the fund, strengthens our Partner Funds’ access to investment opportunities that deliver sustainable, long-term risk-adjusted returns.”