Two U.K. local authority pension funds allocated a combined £455 million ($572 million) to Osmosis Resource Efficient Core Equity Strategy, a spokesman confirmed.
The £4.2 billion Cambridgeshire Pension Fund and the £3.2 billion Northamptonshire Pension Fund, both based in Northampton, England, each hired Osmosis Investment Management to provide customized passive global equity portfolios of £265 million and £190 million, respectively.
The new allocation is funded from a passive strategy. "This is a new investment for both funds, replacing some of our existing passive portfolios," the spokesman said.
The pension funds are part of the ACCESS Pool of local government pension scheme funds with £35 billion in total pooled assets, for which UBS Asset Management already runs passive equity.
While Osmosis will provide the investment strategy, UBS Asset Management will continue to manage the assets under the LGPS framework.
The Osmosis Core Equity strategy replicates exposures of MSCI World index but overweights companies identified by Osmosis as resource efficient.
The spokesman said the strategy was chosen to meet each fund's decarbonization targets set for 2024, 2030 and beyond.
"As part of our vision to make Cambridgeshire greener, fairer and more caring, this investment will not only support us in our work to change the Cambridgeshire fund to a lower carbon, sustainable portfolio, which meets our environmental objectives but maintain strong returns for our scheme members," said Alison Whelan, chairwoman of Cambridgeshire pension committee, in a news release.
Malcolm Longley, chairman of Northamptonshire pension committee, added in the news release: "This strategy was chosen to deliver reliable returns through investment in a wide range of resource-efficient companies, thus enabling us to make significant progress on our decarbonization journey and ultimately benefiting both scheme members and the environment."