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Equities drive LGPS returns but funds report rising transaction costs

Equities continued to act as a key driver of LGPS investment returns last year, supported by strong global equity markets. However, funds also reported a notable increase in investment and transaction costs as assets are progressively brought under pool management.

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LGPS funds reported an annual return of 3.4% over the year, with equities, infrastructure and private debt emerging as the main contributors to performance.

The £100bn LGPS Central pool is set to launch a social housing fund next year and expand partnerships with housebuilders and housing associations as part of a boost to its UK social housing strategy.