Kensington and Chelsea fund considers leaving London CIV

Chair of the investment committee Quentin Marshall told MandateWire the Local Government Pension Scheme fund has not pooled any of its assets with the London CIV as it did not find relevant products from the pool’s offering that matched its investment strategy.

The scheme has the majority of its assets invested in passive tracker funds, while the pool mainly offers actively managed options.

Currently, the RBKC pension fund pays membership fees to the pool. Marshall compared the situation with having a gym membership but never going to exercise there. “For us it is a net cost,” he said. 

Marshall explained that due to its passive investment strategy, the pension fund's management costs are lower than they would be if its assets were invested via the London CIV's actively managed funds, and therefore the pension fund better fulfils its fiduciary duty by staying outside of the pooling arrangement.

He said the pension fund is not critical of the pool, nor does he share the concern of frequent staff changes in the London CIV that some participating funds have voiced, such has the London Borough of Lambeth Pension Fund.

The pension fund's investment strategy statement reads: "The fund recognises the government’s wish for LGPS funds to pool their investments". However, Marshall noted there is no legal obligation to pool assets.

The potential exit of the London CIV will be discussed during the next meeting of the pension fund's investment committee on February 9, but Marshall said the decision may or may not be made on that day.

This article originally appeared on MandateWire.com