LGPS merger plans thwart investment decisions

London councils are in talks to create a pooled £30bn pension fund to reduce administration costs and divert more than £2bn towards infrastructure investment based in the capital.

But PW recently reported plans are being put on hold until other government reforms have been decided. 

Frank West, principal engineer at the London Borough of Tower Hamlets, said: “We haven’t made any major investment decisions recently.

“Over the past six months we’ve allocated around 10% of assets away from passive and into active management, but we’re waiting to see what happens with this administration merger before we do anything bolder.”

Meanwhile, other local authority funds have not been part of the merger discussions, which PW’s sister title the Financial Times reported was the subject of a meeting of several councils last month.

A spokesman from the London Borough of Bexley Pension Fund said he had not received any information on the merger plans from the City of London Corporation or the London
Pension Fund Authority. He first heard of the merger through the FT article.

He said: “It would have been nice to have been told about these plans – especially if we’re going to essentially lose control of our pension fund. But in any case, I doubt these plans will actually go ahead.”

Deborah Ford, investment manager at the London Borough of Havering, also said: “This isn’t really something I know much about. I haven’t had much time to look into it properly.”

At a public sector pensions conference last week, investment experts urged local government pension schemes to rethink their strategies to focus more on active investments, in order to maximise returns in the current volatile market conditions.

Council leaders have also voiced concern over the plans, the timescale of which is still not known.