LGPS under pressure to quit active management
0Government figures have upped the pressure on Local Government Pension Scheme finance directors to dump active fund managers following the crisis Neil Woodford’s Equity Income fund.
A senior source LGPS source told the Financial times that they are under political pressure to switch to passive management following problems that resulted in the fund’s suspension in June.
A key factor was the decision by Kent County Council Pension Fund, a member of the LGPS, to pull a £263m investment out.
Part of the concern is over the transaction fees generated by fund managers like Woodford.
Jeff Houston, secretary to the LGPS advisory board, said: “There are elements within government that want the LGPS to be passive and are trying to find a way for that to happen. There is a belief we are forgoing savings by not going passive. Things like Woodford come along and you get that knee-jerk regulatory reaction . . . the easiest thing is to just stop them having that ability to invest in actives.”
