Border to Coast Pensions Partnership, the UK’s largest LGPS pool, is seeking an external asset manager for its first equity index fund, expected to launch with over £1bn in partner fund assets.
The offering, Global Multi-factor Equity Index Fund, will complement Border to Coast’s existing range of actively managed strategies, helping partner funds pool assets more effectively. It aims to secure over £1bn in commitments from partner funds.
Scheduled for an early 2025 launch, the Global Multi-factor Equity Index Fund will provide partner funds with cost-effective access to a specialist index manager, under the supervision of Border to Coast’s investment team. This marks the pool’s first foray into index funds, enhancing its portfolio of actively managed listed equity strategies.
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Graham Long, head of external management at Border to Coast, said: “The launch of our first index fund marks a further expansion in our capabilities as we build on the strong platform of propositions we have created for Partner Funds. Opportunities in the multi-factor space have grown considerably and form an important component in some of our Partner Funds’ portfolios. Meaningful integration of ESG into the investment approach and alignment with our net zero goal ahead of 2050, coupled with our role as an active steward of assets, will be essential components of the new proposition.”
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Responsible investment, ESG integration, and a commitment to net zero will be central to the selection of the external asset manager, shared Border to Coast. The new strategy will incorporate a mix of investment style factors and follow a science-based climate transition pathway aligned with the net zero commitments of Border to Coast and its partner funds.
The fund aims to outperform the MSCI All Country World Index by at least 0.5% per year (net of fees) over rolling five-year periods. According to the asset manager, this initiative supports long-term investment strategies for partner funds and enables the pooling of assets currently held in external passive strategies.
