Border to Coast on track to save £250m for LGPS funds

Border to Coast Pensions Partnership is on track to deliver over £110m of cumulative net savings to its Local Government Pension Scheme (LGPS) partner funds within its first decade, and over £250m in its first 15 years, according to its third annual report.

The report outlined progress made in supporting Border to Coast’s eleven LGPS partner funds, aiding in the diversification of risk from improved access to a wider range of assets, and increasing the influence of its partner funds as active investors.

Since its establishment in 2018, the pool has launched ten investment opportunities, including five equity funds, two fixed income, and private market opportunities in private equity, infrastructure and private credit.

It also confirmed that it is currently obtaining approval from the Financial Conduct Authority (FCA) for its Multi-Asset Credit Fund, which is due to launch later in 2021.

Border to Coast chair, Chris Hitchen, commented: “We were created to make a difference – and we are already delivering for and behalf our partner funds.

“While we are only three years into our initial five-year strategic plan, given the challenges of setting up a FCA regulated asset manager and managing through Covid-19, what we have achieved together with our partner funds is truly impressive.”

Border to Coast also argued that, with the build costs of a regulated entity completed, the annual cost savings are expected to “significantly increase” in the years to come.

Border to Coast CEO, Rachel Elwell, added: "Some of our partner funds are among the largest and most sophisticated investors in the UK but, through collective endeavour, we are still delivering significant cost savings across the pool – for example in a single transaction we saved two partner funds £3.5m.

“We fully expect to deliver cost savings of £250m in our first 15 years of operation. I’d also like to acknowledge that, given our partner funds were among the larger and more sophisticated funds, so delivering cost savings of this magnitude is all the more impressive.”

“While cost savings are important, Border to Coast is driving greater value in a range of other areas. With our expert in house team, we are opening new investment opportunities for our partner funds, particularly in private markets."

In addition to this, the group’s annual report highlighted the pool's ongoing work around environmental, social and governance (ESG) issues, as previously confirmed in its responsible investment and Taskforce for Climate-related Financial Disclosures (TCFD) report.

“As a long term strategic investor, investing in a responsible manner is fundamental," Elwell continued.

“While this is fully embedded in our investment approach, like many investors we are facing the challenges of robust and comparable data in certain investment classes.

"Through our collective scale we are able to drive new standards in ESG reporting and disclosure.”

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