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Local Pensions Partnership Launches £1.3 billion Credit Fund

The Local Pensions Partnership (LPP) has launched LPPI Credit Investments LP (the “Credit Fund”), offering investors cost-effective exposure to diverse sources of return linked to global credit markets and credit instruments.

The £1.3 billion Credit Fund comprises credit investments of LPP’s two shareholder pension schemes, the Lancashire County Pension Fund (LCPF) and the London Pensions Fund Authority (LPFA), managed by Local Pensions Partnership Investments Ltd (LPPI), the FCA-authorised Alternative Investment Manager (AIFM) of LPP.

The LPPI Credit Fund will target long-term investment returns from a variety of credit-linked assets. It seeks to maximise risk-adjusted returns from exposure to credit instruments through access to best-in class investment strategies, capitalising on illiquidity premia and other technical factors in the global credit markets. The aim is to deliver superior performance throughout the investment cycle; and to achieve this, the Credit Fund will adopt a long-term, buy-and-hold investment approach with a focus on reduced volatility and capital preservation.

Susan Martin, LPP Chief Executive, said:

“The LPPI Credit Fund adds an important new component to our growing, and increasingly diverse,range of investment strategies. At a time of continuing volatility in the global markets, the new Fund can help investors achieve superior performance while mitigating downside risk.

“It also provides another example of how collaboration can benefit our shareholder funds by delivering not only sustainable long-term investment outcomes, but also cost savings through manager consolidation and an enhanced internal investment capability.”

The LPPI Credit Fund is the latest in a series of investment funds and structures launched by LPP in the past year, following the launch of the £1.5 billion Global Infrastructure Fund in June 2017, a £1.8 billion Private Equity structure in March 2017 and the £5 billion Global Equity Fund launched in November 2016. Additional launches are planned over the coming months, with fixed income and total return in the pipeline.