BtC appoints two managers, calls for incentives to invest in UK
Image: Border to Coast
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Border to Coast has added two managers to its global equity alpha fund following an open procurement exercise. The pool has also published a report outlining how it thinks the government could attract greater domestic investment from pension funds.
Baillie Gifford and Jennison Associates have been picked as “high conviction, growth orientated managers who will help ensure the Fund retains an appropriate balance of risks on a forward-looking basis”, the Local Government Pension Scheme pool said.
The two firms join Harris Associates, Ninety One and Lindsell Train as the primary global equity managers in that fund. FountainCap and Goldman Sachs manage the emerging markets allocation. Loomis Sayles will lose its brief once the transition is complete by the end of March.
The global equity alpha fund blends complementary investment styles to create a balanced portfolio of global listed equities and aims to outperform the MSCI ACWI by 2% a year over rolling five-year periods.
‘Blockages’ in planning and lack of incentives
On Tuesday, Border to Coast also published a report, ‘Unlocking UK growth: Do productive assets hold the key?’, saying that there is appetite to invest in the UK, but more is needed to deliver UK productive investments.
Chief executive Rachel Elwell said: “In getting to the heart of the growth problem we must look at both what incentivises capital investment and how to support investments to deliver strong returns.”
Elwell said there is a need for policy certainty and stability; reduced development risk through planning reform and improving areas such as grid connectivity; a strong role for agencies such as the National Wealth Fund and British Business Bank; and a confident investment industry able to work to identify and structure attractive opportunities.
“Over the long term, for growth to be realised I believe we need greater attention paid to industrial strategy, and on equipping people with the skills and leadership needed to build and develop successful companies – as well as clearer routes for accessing, and improved understanding of, fundraising for companies,” she said.
The pool highlighted that it has already invested more than £12bn - or 23% of total pooled investments - on behalf of its partner funds into UK public and private markets, including nearly £1.3bn directly into UK private markets.
For private equity investment, the pool called for:
- clearer guidance from government and regulators on how pension schemes should assess value for money in their investments, focussing more on net returns;
- a government review of the role and resourcing available to the British Business Bank, British Patient Capital and the National Wealth Fund to create a more effective, joined up system that investors can more easily navigate; and
- targeted tax and performance incentives to build a stronger UK-focused asset management industry, particularly targeting growth equity to fill the capital gap for scaling UK companies, with potential solutions including prudently addressing “safetyism” in UK regulation and using tax to encourage UK-directed investment.
For infrastructure, it said investors need:
- rapid passage of the planning and infrastructure bill “in a form that unblocks the UK’s planning system and decreases development risk by boosting transparency, reducing uncertainty over approval timelines, and tackling renewable grid connection delays head-on";
- the roll-out of well-designed ‘catalytic’ initiatives managed by the UK National Wealth Fund and GB Energy to develop infrastructure projects to a point where private sector capital can step in – derisking greenfield projects and enabling the ’crowding in’ of private capital; and
- amendments to the tax regime to incentivise wider infrastructure investment, akin to the Contracts for Difference regime for renewable energy infrastructure.
Would your fund be more likely to invest in UK productive assets if the above list of demands were implemented?
