A group of Welsh local authority pension funds are investing £500 million in healthcare and other themes through private equity.
Eight Welsh pension funds that form the Wales Pension Partnership have awarded the segregated mandate to Schroders Capital, the private assets division of fund manager Schroders.
The news comes following research that showed some degree of optimism for fundraising in private equity, with the amount of firms who expect to raise money this year being the same as last year.
The global investment focus of the Welsh fund’s mandate includes healthcare and technology through co-investments and secondaries and includes venture capital.
Chris Moore, director of corporate services at Carmarthenshire County Council, one of the schemes involved, said: “Private equity has been an important holding for the WPP [Welsh Pension Partnership] constituent authorities but has historically been challenging to access in a cost-effective manner. Pooling offers the opportunity to address this.”
Back in 2020, the Border to Coast Pensions Partnership – another pensions pool that comprises 11 UK local authorities – invested £1 billion in private equity and said pooling had enabled the schemes to obtain exposure to the asset class.
Research by IPEM published this week showed that while many private equity firms consider that 2023 will be a tougher fund-raising environment, two-thirds of general partners surveyed still expected to raise money this year – the same amount as in 2022 – and opportunities are expected to come about by a greater need for restructuring in portfolio companies.
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