The Local Pensions Partnership (LPP) has launched a £5bn Global Equity Fund, made up of the pooled holdings of its existing main clients and shareholder funds; the Lancashire County Pension Fund (LCPF) and London Pensions Fund Authority (LPFA).
The Global Equity fund is the first in a series of asset-class funds to be launched under the LPP’s Authorised Contractual Scheme (ACS) with future funds planned for fixed income, total return and property. More illiquid investments such as private equity, infrastructure and credit are being consolidated under special purpose vehicles over the next six months.
The launch coincides with the revision of investment restrictions on 1 November, which inhibited Local Government Pension Scheme (LGPS) funds pooling 100 percent of their assets in a single collective.
Susan Martin, LPP Chief Executive, said:
“Following our FCA and ACS approval we have been waiting for Government to change the LGPS investment regulations. There are now no barriers to physically pooling our assets and launching the fund.
“As a not-for-profit pension services organisation we provide investment management, risk and pension administration services to a range of clients. This development is another step in delivering the expected benefits of the collaboration between LPFA and LCPF.”
The fund comprises approximately 40 percent internally managed equities with 60 percent managed by MFS, Robeco and Magellan. The new portfolio provides a significant reduction in overall costs for each of the founding investors whilst also maintaining and improving expected investment outcomes.