OUR INVESTMENT PHILOSOPHY Our philosophy can be summarised as:
ABOUT BORDER TO COAST PENSIONS PARTNERSHIP
ing our Partner Funds exposure to equities, fixed income and private markets – and we are currently de- signing a real estate offering. Bor - der to Coast is responsible for the management of these investments though our in-house investment team either directly or through se- lecting and working with specialist external managers. EQUITIES Our equity investments provide our Partner Funds access to companies listed on public markets around the world. As an active steward of assets, we use our influence as a shareholder to engage with com- panies to drive real change and unlock value. Our in-house team is responsible for the management of all our equity funds, either directly, or through selecting specialist ex - ternal managers who provide expo - sure to particular investment styles or regions. FIXED INCOME Our fixed income investments pro - vide our Partner Funds with a dif- ferentiated source of return to equities through government and corporate bonds, loans, debt, credit funds, and asset-backed securities. These investments are managed by our in-house team, either directly, or through the selection of external
managers who provide exposure to specialist fixed income capabilities. PRIVATE MARKETS Private Markets encompasses a broad range of investment types and opportunities which includes specialist sectors or industries, such as private equity, infrastruc- ture and private credit, which can be difficult to access through tradi - tional public markets. Our special - ist in-house team seeks to partner with a range of specialist external managers to develop a diversified, global portfolio which can offer en - hanced risk-adjusted returns. OUR PARTNER FUNDS We were founded by our Local Government Pension Scheme Part- ner Funds to enable the pooling of their assets. They are both our customers and our shareholders. Collectively, they are responsi - ble for the pensions of more than one million LGPS members who work for around 2,700 employers, and are ultimately funded by local taxpayers. Our work is centred on ensuring we make a difference for our Partner Funds by building a sus- tainable organisation that invests responsibly and effectively on their behalf.
• Active management adds value over the long term and enables better integration of ESG consid - erations. • Fully integrated and robust fun - damental research provides the best means of generating superi - or long-term returns. • Engaging with companies as an active steward of assets, rath - er than excluding, is a better means of making a real differ - ence and unlocking long-term value. • Costs are a headwind to invest - ment performance and frequent changes in holdings or managers are detrimental to long-term re- turns. • Well managed businesses with strong governance, diverse Boards and a commitment to sustainability will be more resil - ient and more likely to generate superior financial return. • A commitment to reducing car - bon emissions is essential to achieving long-term success – Border to Coast has committed to achieving net zero emissions across its investments by 2050 OUR APPROACH We design, develop, and operate investment opportunities offer -
Our purpose is to make a difference for the Local Government Pension Scheme. We seek to do this by pro- viding cost-effective, innovative, and responsible investment oppor- tunities that deliver returns over the long-term. This is on behalf of the more than one million LGPS members, over 2,700 employers, and the millions of taxpayers asso - ciated with our Partner Funds. We are regulated by the Financial Con- duct Authority (FCA). The work Border to Coast under- takes is centred on ensuring we deliver on our purpose by building a sustainable organisation that in - vests in a responsible manner. WHAT DO WE DO? We were established by our Part- ner Funds to facilitate the pooling of their investments with the ob- jective of improving value for mon - ey through scale, increased access to investment opportunities, and strengthened governance. Pooling gives us a stronger voice and, working collectively with our Partner Funds and across the asset
owner and asset management in- dustry, we aim to deliver cost-effec - tive, innovative and responsible in - vestment, thereby enabling strong, risk-adjusted, performance over the long term. Responsible investment runs through all that we do and we are an active steward of our Partner Funds’ assets. We engage with companies on their behalf to drive positive real world change in the belief that this is the best way to both mitigate material financial risks, and unlock greater long-term value. INVESTING FOR THE LONG TERM Our investment approach is shaped by the needs of our customers, our Partner Funds. They operate open-ended defined benefit pen - sion schemes on behalf of 2,700 employers, representing more than one million people, and ultimate - ly backed by local taxpayers. The invested assets are intended to fund pension payments for scheme members many years into the fu- ture – in some cases into the next century. Our Partner Funds’ focus
is on generating consistent returns, with an emphasis on ensuring the sustainability of the fund and main- taining stable contribution rates for employers. To deliver for our Partner Funds, we take a long-term approach to investment. We develop and op- erate innovative, cost-effective in - vestment propositions that support our Partner Funds in implementing their strategic asset allocations. Gaining a deep understanding of the investments we make and the third parties we work with is crucial in managing these portfoli - os. In particular, we believe that envi - ronmental, social and governance (ESG) issues can have a material im- pact on the value of financial assets and on the long-term performance of investment portfolios, and we believe strong and sustainable in- vestment performance is delivered through robust portfolio risk, re - search, and responsible investment capabilities.
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