Border to Coast increases investment in private markets

Border to Coast Pensions Partnership has confirmed a new £1.7bn investment in its £12bn private markets programme.

This will see Border to Coast invest £261m in private equity, £502m in infrastructure, £486m in private credit and £452m in climate opportunities.

The pool said the £12bn private markets programme is “integral” to its delivery of “cost-effective” access to wider range of investment on behalf of its 11 Local Government Pensions Scheme (LGPS) partner funds which have assets totalling £60bn.

Border to Coast detailed that £350m of the new investments are a part of ‘Climate Opportunities’ which targets attractive returns via investment seeking to have a material positive impact on climate change and support net zero emission goals.

Commitments include a UK-focused strategy targeting assets that support the net zero transition, including greenfield renewables power generation, grid infrastructure and storage assets, it added.

The programme is also delivering investment into a range of growth assets. This includes a co-investment into one of the largest co-located solar and battery energy storage systems projects in the world, Edwards Sandborn which, once completed, will deliver 1,300 MW and displace more than 320,000 tons of CO₂ emissions annually.

The pool added that the scale of investment has enabled “significant cost reduction”, with savings estimated at 0.4% per annum and a 26% reduction in headline fees, across all strategies.

The latest £1.7bn investments conclude the £4bn ‘Series 2A’ private markets programme first announced in April 2022.

In December 2022 Border to Coast confirmed the initial £2.2bn of investments of this strategy.

Mark Lyon, deputy chief investment officer at Border to Coast, said: “As a large and sophisticated investor, we are securing high quality and cost-effective investment opportunities for our partner funds. These have the potential to offer enhanced long-term investment returns while reducing costs.”

Ian Sandiford, head of investments (alternatives) at Border to Coast, added that ‘Climate Opportunities’ is an “innovative” investment strategy which is delivering “significant” investment to enable the energy transition to net zero, supporting both its partner funds’ investment strategies and its own commitment to net zero.

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