Border to Coast Pensions Partnership, Leeds, England, hired three managers to run up to £1.2 billion ($1.6 billion) in U.K. equities.
The local government pension scheme pool, made up of 12 pension funds representing £46 billion in total assets, said it hired Baillie Gifford, Janus Henderson Investors and UBS Asset Management as its first external money managers.
The three will manage assets for the Border to Coast U.K. Listed Equity Alpha Fund, which, subject to approval by the Financial Conduct Authority, is set to launch later this year. Rachel Elwell, CEO of Border to Coast, said in an email the split of the allocation will vary with market movements and over time, although within defined ranges. She said the starting allocation is not an equal split, with the allocation to small caps lower than one-third, for example. “The others will not necessarily be divvied equally depending on the factor composition of the overall blend,” she said.
The pool launched a search in the summer; consultant Mercer assisted. More than 30 money managers submitted proposals, Border to Coast said in an announcement Monday.
Baillie Gifford and UBS Asset Management will be benchmarked against the FTSE All-Share index, while Janus Henderson will focus on smaller companies.
"We are delighted that we will be launching our first externally managed subfund with such a strong lineup of investment managers," Ms. Elwell said in the announcement. "It is a testament to the commitment of the asset management community to the LGPS that we received so many high-quality submissions."
The pool also plans to launch an externally managed global equities strategy next year. The RFP is set to be issued in the first quarter of 2019.
