Brunel opens global small cap equities fund
Brunel Pension Partnership has launched a £300m multi-manager sub-fund focused on global small cap equities.
The Local Government Pension Scheme (LGPS) pool appointed Montanaro Asset Management, American Century, and Kempen Capital Management to run the fund following a two-stage selection process.
Brunel's ten partner funds told the pool they wanted a portfolio offering exposure to the small cap premium as the primary driver of returns.
Head of listed markets David Cox said: "The global small cap equities fund gives our clients access to a range of investment approaches, with low correlation between our chosen managers. The manager allocations reflect how the fund is constructed to ensure a balancing of conviction, risk, and liquidity considerations."
The fund has also worked with the managers to integrate its responsible investment principles and engage with holdings, resulting in "robust or developing ESG integration and engagement in an asset class sometimes seen as a laggard in this area", said the fund's portfolio manager Stephanie Carter.
Investments in developed markets will be targeted, as defined by their inclusion in the MSCI World Small Cap index, with an outperformance target of 2-3% net of fees.
Client relationship director Matthew Trebilcock said: ""The launch of the global small cap equities fund offers our partner funds access to a different asset class and a different set of growth drivers. Given their long-term horizons, that's very valuable, both in terms of capturing different opportunities, and of reducing correlation across their portfolios."
Brunel was set up to collectively invest on behalf of its ten partner funds, which together had around £33bn of assets as of last December. These include the LGPS funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Gloucestershire, Oxfordshire, Somerset, and Wiltshire, as well as the Environment Agency Pension Fund.
Last week the pool announced it had appointed four managers to a £1.2bn diversifying returns sub-fund which aims to offer downside protection and act as a stabiliser when portfolios come under pressure.
More on Investment
How the BT Pension Scheme will safeguard its portfolios and the planet from climate change
Morten Nilsson explains why the BTPS is aiming to be net zero on carbon emissions by 2035, and how it plans to get there.
Industry Voice: Why Build to Rent has remained resilient despite Covid-19
Build to Rent has weathered the pandemic resiliently. With rent collection and occupancy remaining high, and economic trends looking supportive, there are compelling reasons to look to invest.
RPMI Railpen invests in former Woodford-backed Covid-19 test producing biotech company
RPMI Railpen has funded part of the £84.4m in new capital raised by biotech company Oxford Nanopore Technologies.
Market Movers Blog: UK investors report uptick in trading post-Covid-19
In this live blog, Professional Pensions' sister title Investment Week collates all the breaking market news, analysis and opinion on equity, bond and currency movements as well as the impact of trade wars, tightening monetary policy and the Brexit negotiations....
Industry Voice: How best to approach climate change risk management?
Columbia Threadneedle Investments' Chris Wagstaff considers how asset owners might best approach climate change risk management by adopting a number of non-mutually exclusive mitigating actions to address transition and physical risks.
