News Roundup: LGPS hedge fund holdings, Newham housing scheme, Right to Buy threat
0LGPS funds increase hedge fund holdings
Investment in hedge funds by the UK’s 10 biggest Local Government Pension Scheme funds has risen by a third to £2.2bn in the year to March, according to Reuters. It found that the 10 schemes, with investments of £259bn, has seen the percentage of their assets allocated to hedge funds rise from 2.1% to 2.3%. Just one of the LGPS funds analysed — Greater Manchester Pension Fund — said it had no hedge fund investments.
Newham vehicle snaps up housing scheme
Red Door Ventures, Newham Council’s standalone housing company, is spending £120m on a private rented housing scheme in west London. The firm expects a yield of between 4% and 5% on the investment in the Collective Old Oak, a 546-bedroom co-living scheme. Red Door was created in 2014 with the aim of developing PRS homes.
46 councils slammed for business rates sloth
The Federation of Small Businesses has criticised 46 local authorities for failing to distribute business rates relief granted by the government nine months ago. FSB national chairman Mike Cherry, said: “We are now down to the rump of 46 councils who have yet to lift a finger to help their local businesses. Among them are authorities with some of the largest fund allocations, including Hammersmith & Fulham, Nottingham and Northumberland, who have collectively been guaranteed £7.5m in urgent support for the five years ahead. It’s completely unacceptable that small firms in these areas are being put in jeopardy by this lethargic attitude.”
Barnet pension fund makes infrastructure investment
London Borough of Barnet Pension fund has joined 28 other investors in IFM Investors’ infrastructure funds. In total, 29 European and Middle Eastern investors have committed US$2.15bn to infrastructure equity and debt strategies. Annabel Wiscarson, executive director at IFM Investors, said: “From UK local authority and private company pension schemes, to those based in continental Europe, institutional investors recognise the increasing appeal of infrastructure equity and debt as potential sources of uncorrelated returns to other asset classes that can effectively match long-term liabilities. Regulation such as Solvency II is also having an effect, making infrastructure a more attractive investment proposition.”
LGA: Right to Buy under threat
The Right to Buy could grind to a halt unless the government allows councils to replace the homes sold off under the policy, according to the Local Government Association. The latest Right to Buy figures reveal that local authorities sold 2,558 dwellings under Right to Buy in July–September 2017. By contrast, just 744 homes were started in replacement. Martin Tett, the LGA’s housing spokesman, said: “It’s essential councils are able to keep 100% of their Right to Buy receipts, and that all councils, across the country, are freed to be able to borrow to build new homes — the upcoming Local Government Finance Settlement would be an ideal opportunity to do this.”
Council makes £2.35m out-of-borough property investment
West Lindsey District Council has paid £2.35m for a Travelodge 75 miles away in Keighley. It is the first commercial property by the authority outside its own borders, and is expected to reap around £90,000 in rent. Council leader Jeff Summers said: “Investments inside and outside the district will generate income and that will be used to support the investment of more than £30m within West Lindsey with an expected economic impact assessed at being in excess of that.”
