Not just London calling: A look at the UK's busiest LPs

September 10, 2019
British LPs have nowhere near the firepower enjoyed by their US counterparts. But while there are no real UK equivalents to the likes of California Public Employees' Retirement System or New York State Common Retirement Fund, the small island's pension funds and endowments have been quite busy.

UK pension funds, though smaller in size, have been among some of the most active in Europe since the start of 2014 based on their number of disclosed fund commitments. What is also remarkable is that only two of the top 20 European LPs are headquartered in London, and they've made fewer commitments than the following UK powerhouses. Using PitchBook data, we took a look at these LPs' activity in the PE investment community:

Greater Manchester Pension Fund

For over 40 years, Greater Manchester Pension Fund has provided retirement and pension benefits to the employees of various institutions in Greater Manchester. The fund has made 263 commitments to date—82 of those being with funds that have closed since 2014. GMPF has about £13 billion (around $16 billion) in AUM and around 7% of that is designated to private equity.

The fund predominantly seeks PE exposure via fund commitments across North America, Europe and Asia. However, it does not shy away from direct investments, specifically domestic infrastructure; it backed Airport City Manchester and London's GLIL Infrastructure in 2013 and 2015, respectively.

South Yorkshire Pensions Authority

Set up in 1988, South Yorkshire Pensions Authority's membership includes local authority employees and pensioners across four districts. The authority has earmarked roughly 12% of its £8.43 billion AUM for private equity. In reality, its private equity allocation is closer to 17%. As of March, its private equity portfolio was valued at £1.4 billion.

The majority of SYPA's 204 commitments have gone to managers based in Europe and the US, with a handful of commitments going to Asia. The LP has made 79 commitments to funds closing since 2014 across a range of strategies. Traditional private equity accounts for just over a third of its alternatives portfolio, followed by private debt and real assets, which account for roughly 15% each.

Merseyside Pension Fund

Managed by a 15-member committee, Merseyside Pension Fund provides retirement and pension benefits to members in Merseyside, the metropolitan country that includes Liverpool, where MPF is located. Its investment portfolio is worth around £9 billion and roughly 6.7% is in private equity. The fund has made 253 commitments in total—61 of which have occurred since 2014.

While the fund is chiefly focused on traditional private equity and real assets—like GMPF, it is also a backer of GLIL Infrastructure—it invested £30 million in June alongside Funding Circle to support a private direct lending fund that enables institutional investors to fund small businesses.

East Riding Pension Fund

Like SYPA, East Riding Pension Fund resides in the largest of England's counties: Yorkshire. The defined-benefit public pension fund administers the scheme for the region's four unitary authorities, plus more than 300 other organizations. Around 4.6% of ERPF's £4.78 billion portfolio is in private equity.

Of its total 123 commitments, the lion's share (87) are in Europe, with the rest going to the US and Asia. It has made 55 commitments to funds closing since the start of 2014, including the £744 million Glennmont Clean Energy Fund Europe III. The June energy commitment came less than a year after ERPF and others were accused of being climate change investment "laggards" by Friends of the Earth.

Clwyd Pension Fund

Clwyd Pension Fund in based in Flintshire, the northernmost area of Wales that borders Liverpool. The fund provides pension and death benefits to its members and local government employees. Its investment portfolio is valued at £1.6 billion, with 10% earmarked for private equity.

In 2016, its private equity portfolio was valued at over £139.5 million—an increase from 2015, when the fund had £112 million invested in PE. Over the years it has made 173 fund commitments, with just over a quarter (45) of these taking place since 2014.

Featured image via Drazen_/iStock/Getty Images Plus 

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