Border to Coast Pensions Partnership, Leeds, England, is searching for money managers to run a portion of a £1 billion ($1.3 billion) emerging markets equity alpha fund, the pension pool said Tuesday.
One of the U.K.'s largest public-sector pension pools, Border to Coast is owned by 11 local government pension schemes, with combined assets of £55 billion. The pension funds are Bedfordshire, Cumbria, Durham, East Riding, Lincolnshire, North Yorkshire, Surrey, South Yorkshire, Teesside, Tyne and Wear, and Warwickshire.
Border to Coast is looking for one or two emerging markets equity managers to manage about £650 million. They would join two China specialist managers already in place.
The fund will seek to outperform the MSCI Emerging Markets index by at least 2 percentage points a year net of fees over rolling three-year periods. The new emerging markets equity managers will have the same goal above the MSCI Emerging Markets ex-China index, according to a presentation on the Border to Coast website.
Managers will be assessed on their integration and reporting of ESG issues and their active engagement with companies. "It is really important that ESG is an integrated part of their investment process. We are interested in your net-zero approach and plans," said Graham Long, head of external management, in the presentation.
Managers must have a strategy with at least £1 billion in assets under management and a five-year track record in either emerging markets or emerging markets ex-China. Fees will be capped at 50 basis points for a £300 million mandate. Border to Coast will accept only all-cap strategies, according to the presentation.
Responses are due May 31, and a selection will be made by the third or fourth quarter, with the fund launching in the first quarter of 2023. Mercer is assisting.
