Interview – Border to Coast
INTERVIEW – JOE MCDONNELL
“We have been successful over the past five years, but we need to be constantly on our toes.”
In his first interview as Border to Coast’s chief investment officer, Joe McDonnell tells Andrew Holt about the attrac- tions of joining the pool, why non-consensus thinkers offer so much and the challenges of the next five years.
How would you sum up your first eight months at Border to Coast? It’s been great. I knew some of the Border to Coast team, and several of its partner funds, before I came here, which helped. I’ve enjoyed the energy of the place and the commitment of its people. Border to Coast has come a long way since it was launched five years ago and is a well-resourced pool, able to provide a broad suite of capabilities through our in-house team and external managers. In my first few months here, I’ve been focused on getting to understand and know the investment team, as well as our partner funds.
What have you learned about how Border to Coast operates since you arrived?
12 | portfolio institutional | September 2023 | Issue 126
A key part of my coming here was the rec- ognition that Border to Coast has long- term backing from its partner funds and is
already managing significant assets across key asset classes – I have always philosophically believed that you need to be in close proximity to the markets to be an effective investor. As an investor, the team benefits from combining bottom-up insights with top- down macro thinking and more strategic thinking on secular trends, and what this means for our partner funds. We certainly benefit from a combination of the insights you get from being a direct investor with the engagement you get with some of the best managers in the world.
Why did that model interest you?
Given the evolution of the corporate DB market, it’s increasingly rare to find insti- tutional investors in the UK who have expanding growth engines with signifi- cant allocations across public and private markets. That, along with a commitment to active management, internal and exter- nal, is the best combination in terms of managing money and, for me, is an in- credibly exciting opportunity. I believe this framework gives the LGPS a long-term competitive advantage over other institutional investors and wanted to play a part in it.
Looking at other investment models, are there any lessons from the LDI crisis last year? It’s a useful reminder that leverage is lev- erage, regardless of how some try to pack-
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