Local government pension scheme (LGPS) Border to Coast Pensions Partnership has launched a new £1.2bn UK real estate fund.
Partner funds, Tyne and Wear Pension Fund, Cumbria Pension Fund and South Yorkshire Pensions Authority, have pooled 65 existing holdings to seed the proposition at launch.
The assets include offices, retail, care homes, student accommodation and industrial and warehouse facilities across 26 UK counties.
The fund, which is expected to more than double in size to more than £3bn in the next five years, will target investment in new sectors, including life sciences and affordable housing.
Joe McDonnell, chief investment officer at Border to Coast, said: “The launch of UK the UK real estate fund is testament to the progress our partnership has made to date. It is a sophisticated proposition that draws on the benefits of scale to unlock greater access to quality, long-term investment opportunities in the UK for partner funds.
“That same scale has enabled us to build a dedicated and highly skilled in-house team with years of experience in the UK real estate market to support partner funds. The depth of expertise we have at Border to Coast coupled with the ongoing support of partner funds enables us to launch propositions that truly make a difference for the LGPS.”
George Graham, director at South Yorkshire Pensions Authority, added: “The launch of the UK real estate fund is a prime example of the benefits of collaboration and scale that pooling can provide LGPS funds. The creation of such a large fund, dedicated to investing in the UK, provides partner funds with access to a significant investment capability that has not previously been available to many, as well as access to assets of a type which would not have been available to partner funds acting alone.”
Doug Rathbone, chair of Cumbria Pensions Committee, said: “The Cumbria Pension Fund has successfully invested in UK property for many years. To enhance that investment, it has taken the decision to transfer the majority of its UK property into the newly launched UK real estate proposition from Border to Coast. This enables us to have greater access to high quality investment opportunities than we might have been afforded alone, as well as benefit from the experience developed in the Border to Coast team.
“We have been working with other partner funds and the Border to Coast team to develop this proposition and are pleased to be one of the founder investors in this asset. It is a great example of how Border to Coast works collaboratively to develop its investment propositions to meet the investment needs of its partner funds.”
Border to Coast has appointed abrdn as investment adviser and to implement the strategy at portfolio level and Workman has been appointed property manager.
Cameron Murray, head of UK and European real estate at abrdn, said: “We are proud to have been appointed to support this incredibly important mandate and look forward to partnering with Border to Coast to deliver the objectives of the partner funds. We are keen to enhance the base portfolio, utilising the skills of our dedicated transactions team in order to identify the best opportunities in the market, with a wider opportunity-set now available through the efficiencies of scale and an aligned approach to responsible investment.”
