The £35 billion ($43 billion) Brunel Pension Partnership in the U.K. picked Neuberger Berman to manage its third cycle private equity portfolio.
The £626 million investment will operate under the name NB Clifton Private Equity III and is a bespoke vehicle at the fund, which is one eight U.K. local government pension scheme (LGPS) pools. Brunel aggregates the investment portfolios of the Avon, Buckinghamshire, Cornwall, Devon, Dorset, the Environment Agency, Gloucestershire, Oxfordshire, Somerset and Wiltshire funds.
According to Brunel, the strategy will commit 40% to impact investments “contributing to solutions for society and the planet,” while the remaining 60% will be invested according to Brunel’s responsible investment policy.
“Private equity has always appealed to our clients as a diversifying asset class with attractive risk-return characteristics,” said Jaime Alvarez, portfolio manager of private equity at Brunel, in a statement. “Private equity also offers a particular opportunity to fulfil our clients’ Responsible Investment ambitions, both through investing with managers that incorporate robust ESG processes, and through increasing our allocation to the rapidly growing impact investing asset sub-class. We already know Neuberger Berman well and trust its ability to select investments that are not only financially sound but also impactful.”
Brunel originally made a $60 million commitment to the Neuberger Berman Private Equity Impact Fund in 2019 on behalf of four local government pension scheme clients, as well as an anchor commitment to NB Private Equity’s flagship co-investment fund.
Then two years ago, Neuberger Berman won Brunel a £1.3 billion climate transition-linked multi-asset credit mandate plus a £175 million commitment to NB Private Debt IV, a senior direct lending fund.
The latest investment completes Brunel’s third vintage private equity portfolio. Neuberger will commit most of the capital to third-party primary funds; opportunistic secondaries and co-investments that will be made via Neuberger Berman’s commingled funds.
“Private equity continues to provide an all-important source of diversification for institutional investors and opportunities for long-term value creation, which will be critical for delivering on LGPS investment objectives,” said Ed Jones, head of U.K. institutional client business at Neuberger Berman.