Royal County of Berkshire Pension Fund, Maidenhead, England, will take an up to 20% stake in alternative money management firm Gresham House, confirmed Councilor John Lenton, chairman of the fund and its advisory panel.
A spokeswoman for Gresham House said the firm is issuing new shares. Berkshire will purchase up to 20%, either through the new offering or a combination with secondary market sales. The deal equates to up to a £8.13 million ($10.1 million) investment for the £1.9 billion pension fund.
Gresham had £360 million of assets under management as of June 30. It invests primarily in U.K. and European smaller public companies. It also runs a forestry strategy.
Berkshire also intends to become a cornerstone investor in a new strategy set for launch by Gresham House subsidiary Gresham House Asset Management. Berkshire's intended commitment was not disclosed. The strategy will be part of the Gresham's plans to establish a platform of alternative and illiquid strategies for long-term investors.
The British Strategic Investment Fund, which has not yet been launched, will have a target size of £300 million and will focus on three themes identified as being of strategic importance to the U.K. by the chancellor of the exchequer in the 2016 Autumn Statement: innovation, housing and infrastructure.
The platform will be open to other institutional investors, and Gresham House said initial discussions with a limited number of local government pension scheme funds “have confirmed interest in the objectives” of the platform, said the filing.
“The investment(s) we will make in (British Strategic Investment Fund) will depend on the fund offering investment opportunities that meet our portfolio requirements and we will be, and indeed are, working with BSIF in developing suitable investments for the fund,” said Mr. Lenton in an email. “We have chosen to work with Gresham because we consider (them to be) suitable partners in developing the types of transaction that meet our investment requirements.” He said the fund invests long term, and does “not have to worry about short-term liquidity to meet short-term panics. We can therefore take a long-term view on our investments and invest where appropriate in, for example, low-carbon housing, retirement villages or electricity grid rebalancing. We could even invest in new medical developments where the returns may be several years in the future,” he added.
