ACCESS appoints Adams Street and HarbourVest as Private Equity Allocators

The ACCESS LGPS pool has appointed Adams Street and HarbourVest to run a private equity mandate that could reach between £8 billion and £12 billion in size over the next few years.

The two firms will source assets on behalf of ACCESS’s 11 LGPS funds. Private equity investments will be made through a “multi-vintage programme”, giving funds the ability to invest over multiple years.

The LGPS funds are expected to commit at least £500m a year for the first five years of the arrangement, with Adams Street and HarbourVest potentially managing between £4 billion and £6 billion each across the life of the mandate.

Mark Kemp-Gee, chairman of the ACCESS Joint Committee, said: “Our scale and assets have grown to the point where the pool is harnessing the benefits of being able to invest in private equity at a much lower cost, and [we] hope to reap the diversification benefits and potentially higher returns than on traditional assets.”

Both managers will invest globally across primary and secondary vehicles and co-investments, according to a press release from ACCESS.

Emily Archer, managing director for investor relations at HarbourVest, said: “This exciting mandate harnesses the benefit of the ACCESS pool’s scale to create sophisticated and flexible investment solutions appropriate to the needs of the [local] authorities.”

It comes as ACCESS seeks to establish an internal team and a regulated investment management company to ensure compliance with the government’s intention for LGPS pooling.

In a statement, the pool said: “Efforts are underway to develop the investment team which will be responsible for portfolio management, oversight capabilities and enable the pool to provide further value for money and the economies of scale that it has delivered thus far.”

Over the past 18 months ACCESS has announced a range of private markets mandates, including several targeting real estate. These include a £1.3bn property fund run by CBRE Investment Management, a long-lease mandate awarded to Aviva Investors, and a £100m impact real estate fund run by Orchard Street Investment Management.

The pool has also backed an affordable housing fund run by Legal & General Investment Management.