Border to Coast to launch £1 billion EM equity alpha fund

Border to Coast Pensions Partnership will launch a £1 billion emerging markets equity alpha fund in the first half of 2023.

The fund, which has already appointed two China specialist managers, will work with up to two emerging market equity managers to manage around £650 million in assets.

The successful candidates must demonstrate EM equity experience and have a long-term, high conviction approach to stock selection.

They must also satisfy Border’s requirements for the integration and reporting of environmental, social, and governance (ESG) issues, including climate change considerations, and their active engagement with companies.

“We are looking to combine a selection of high quality managers with the aim of delivering long-term, risk controlled, outperformance for our partner funds,” said Graham Long, Border to Coast’s head of external management.

“Emerging markets are very diverse, and this year we have seen first hand how polarised individual market performance can be.”

The fund’s benchmark will be the outperformance of the MSCI Emerging Markets Index by at least 2% a year net of fees over rolling three year periods.

The fund expects to appoint the managers in the second half of 2022, following a search that complies with public procurement rules.