Border to Coast invests a further £370m in private equity

Border to Coast Pension Partnership has invested a further £370m in private equity, as it continues to provide new investment opportunities for its 11 Local Government Pension Scheme (LGPS) partners.

The £46bn LGPS pool committed the multi-million pound investment to five new private equity funds which form part of its second private equity offering.

This offering, which the partnership named 1B, received £485m of commitments from eight partner funds last year, of which 75% is now committed with the remaining expected to be deployed by 31 March.

The private equity funds that will receive a proportion of the pool’s latest investment are KKR Asian Fund, Thoma Bravo Fund, Nordic Capital Fund, AlpInvest Co-Investment Fund, and Endless Fund.

These commitments provide exposure to a number of Border to Coast’s targeted themes within private equity including operational value add, buy and build, mid-market, healthcare, technology, Asia, distressed and co-investments.

As part of the due diligence process, Border to Coast is developing longer-term relationships with key industry participants to enable partner funds to collectively benefit from their investments in private markets.

Border to Coast has also appointed Cleveland & Co on a three-year contract to provide advice on investments it will acquire across the private markets platform covering private equity, infrastructure, and private credit.

Cleveland & Co will be reviewing all investment documentation throughout each investment, advising on legacy transfers and secondary sales, and providing support and guidance to the private markets investment team.

The firm will also provide training to facilitate knowledge transfer to the legal and investment teams.

Border to Coast head of internal management Mark Lyon said: “Private equity is an important asset class for our partner funds, providing a differentiated risk and return profile relative to public equity markets.

“With our experienced in-house team, we have been able to generate meaningful fee savings for our partner funds while accessing high-quality investment opportunities with capacity constrained managers. I’d like to thank the managers involved for their constructive approach throughout the investment process in what has been a challenging time.”

This comes after the public sector pension pool last year completed £500m of private equity investments which consisted of nine investments with high-quality managers and exposure to the fund’s targeted themes.

In 2019, the partnership launched its private credit offering and announced its initial investments in private equity and infrastructure while pledging £1.8bn of commitments over the next 18 months to capture the benefits of pooling for its LGPS partner funds.

Source: Professional Pensions