Border to Coast picks external managers for credit

Border to Coast Pensions Partnership, one of the largest UK public sector pension pools in the UK with assets totalling £46 billion, has selected Royal London Asset Management, M&G Investment Management and Insight Investment as its external asset managers for a Sterling Investment Grade Credit Fund, which is expected to reach £2 billion at launch. Subject to Financial Conduct Authority approval, the strategy is scheduled to launch in early 2020.

The appointments follow an extensive manager selection exercise undertaken by Border to Coast, with support from investment consultant Mercer. Around 25 asset management firms submitted proposals, which were scored for technical quality, value for money and complementarity of fit.

Rachel Elwell, CEO of Border to Coast, which oversees 12 Local Government Pension Fund schemes, said this is the first in a series of fixed-income funds to support the pool’s partner funds in implementing their strategic asset allocations. “We were particularly pleased with the way the asset management industry responded to the challenges we made to deliver innovative and value for money mandates, and we believe that the selected managers will contribute strongly to our purpose of making a difference to investment outcomes for the LGPS,” she noted.

Andrew Carter, CEO of Royal London Asset Management, believes this is an important stage in the development of local authority pools. He looks forward to building a long-term partnership with Border to Coast to help deliver benefits for their underlying LGPS funds.

Adrian Grey, Global CIO at Insight Investment, added that the firm will be applying its Buy and Maintain strategy, an approach which seeks long-term value in credit markets and is aligned with Border to Coast’s focus on environmental, social and governance (ESG) principles.

Jenny Williams, head of institutional public debt at M&G, is also looking forward to building a long-term relationship and delivering excellent returns to assist Border to Coast and their partner funds to pay their members’ pensions.

In July 2018, Border to Coast launched its first two equity funds managed by its internal investment team followed by further equity funds in October and December 2019. In total, approximately £9 billion of partner fund assets are currently being managed by Border to Coast. Further fund launches are expected to be announced soon for multi-asset credit and private credit.