• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Slough welcomes commitment that Office for Local Government ‘will not be a burden’

    June 30, 2022

  • Homes England agrees strategic partnership with two authorities

    June 29, 2022

  • Soaring inflation and pay pressures to add £3.6bn to council budgets

    June 28, 2022

  • Underfunded social care reforms could ‘exacerbate workforce pressures’

    June 27, 2022

  • Nottingham City Council leader labels proposed intervention as ‘disappointing’

    June 27, 2022

  • Government preparing to intervene in Nottingham City Council

    June 23, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Local Pensions Partnership launches with FCA approval and an eye on treasury assets

0
  • by Colin Marrs
  • in 151 News · LGPS
  • — 13 Apr, 2016

The second Local Government Pension Scheme pool to gain regulatory approval will manage some treasury investments on behalf of one of its member councils, Room151 has learnt.

Following Financial Conduct Authority approval, announced this week, the Local Pensions Partnership (LPP) – a tie up between Lancashire County Pension Fund (LCPF) and London Pensions Fund Authority (LPFA) – will be able to officially pool their assets.

The LLP joins the London CIV as one of two FCA regulated entities to have emerged so far from ongoing efforts to pool LGPS funds.

Mike Jensen 2

Mike Jensen

Mike Jensen, formerly chief investment officer (CIO) at LCPF, will move to the new partnership as joint CIO, taking with him the treasury bond portfolio he manages on behalf of the county council.

Speaking to Room151, chief finance officer and managing director for LPP, George Graham, said: “Mike will be carrying out the same job he currently does for us, including the council’s main bond portfolio.

“The council’s other treasury operations have always been carried out by our traditional treasury team and that will continue.”

Jensen will become joint CIO at the new pension pool along with Chris Rule, formerly CIO at the LPFA, with responsibility for different asset classes split between the pair.

Susan Martin will move from her role as chief executive of the LPFA to the equivalent role at LPP.

Berkshire Pension Fund, currently a client of the pool, is in discussion about becoming an equal shareholder in the new body, according to Graham.

“If they want to join, they will have equal status, which will give them the right to appoint a non-executive director,” he said.

However, he added that shareholders do not benefit financially from the vehicle, with any profits being repaid or allowing lower fees for clients.

Graham also said that the new venture is considering “the germ of an idea” to create a new treasury investment product that would be accessible to smaller authorities.

He said: “In the past, a number of districts in Lancashire have asked if there is some sort of product we can create around a bond portfolio we can manage for them.

“One of the reasons that smaller councils are stuck investing with banks is that they will take their money and they are easy to deal with, but there is currently no comparable diversified solution for them.”

Graham also said that other than efficiency savings from pooling, the new arrangement will allow the funds to reduce costs relating to employer risk management and employer covenant issues.

“Our focus has always been wider than just pooling assets but all of that has been overtaken by the government’s intention to pool assets,” he added.

Local government pensions experts agree that the other emerging pools will also require FCA approval before they begin operations.

John Harrison, independent investment adviser to Surrey Pension Fund, said: “I actually don’t think you are going to have a choice. If you are going to be a repository of other people’s money, you have to be regulated.”

He warned that this would mean that individual authorities would have to sacrifice influence over the selection of pool fund managers.

“The FCA won’t allow the creation of a vehicle that has its decisions approved by another entity,” he said.

“There has been a pace of travel about the whole process that means that many councillors might not have clearly understood fully this consequence.”

Ralph McClelland, associate director at pensions law firm Sackers, said: “When you create a company or a trust and you appoint that to manage a pool of assets, it no longer has the exemption from FCA regulations that individual LGPS funds currently enjoy.”

The LPP also this week announced the appointment of a number of new non-executive directors, including Sally Bridgeland, former chief executive of the BP Pension Fund; Sir Peter Rogers, former chief executive of Westminster City Council and Robert Vandersluis, director of GlaxoSmithKline’s global pension investments.

LPP is currently recruiting for a full-time chief risk officer, with the position being held on an interim basis by Dr Angela Smith, who also moves from the LPFA.

Graham added that discussions about collaboration with the Northern Powerhouse pool, consisting of funds in Greater Manchester, Merseyside, West Yorkshire, are continuing.

The LPP’s combined assets of £13.71bn are currently significantly below the £25bn benchmark that the Treasury has set for the new pools.

Get the Room151 Newsletter

Share

You may also like...

  • Pension power: beyond net zero 4th Feb, 2022
  • LGPS & COP26: The expected, the needed and the opportunities 26th Oct, 2021
  • ‘100 greener days in office’ 19th May, 2021
  • Ryan Boothroyd: Post-covid world holds opportunity for long-term LGPS investors 28th Apr, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Homes England agrees strategic partnership with two authorities
    • Soaring inflation and pay pressures to add £3.6bn to council budgets
    • Underfunded social care reforms could ‘exacerbate workforce pressures’
    • Nottingham City Council leader labels proposed intervention as ‘disappointing’
    • Government preparing to intervene in Nottingham City Council
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 2 days ago

    Hillier confirmed as keynote speaker for LATIF/FDs’ Summit: Dame Meg Hillier, chair of the Public Accounts Committee, has been confirmed as a keynote speaker for Room151’s combined Local Authority Treasurers Investment Forum (LATIF) and FDs Summit. The… dlvr.it/ST70F7 pic.twitter.com/hxV676Iley

    Room151 2 days ago

    Councils’ funding at risk due to ‘undercounting’ in census data: Population estimates in London and Manchester may have been significantly underestimated in the 2021 census potentially threatening government funding for frontline services in these… dlvr.it/ST707J pic.twitter.com/VncIyaXa01

    Room151 3 days ago

    Gove at LGA: councils to receive two-year financial settlement: Michael Gove has announced that councils will receive a two-year financial settlement from next year to provide authorities with “financial certainty” and allow them to plan ahead. The… dlvr.it/ST0kSV pic.twitter.com/wxL3UM4sGO

    Room151 3 days ago

    LGPS valuations: the digital journey: Rob Bilton explains how technology is helping to deliver one of the most complex data exercises in the world of public sector pensions. The 2022 valuations for LGPS funds in[...] dlvr.it/ST0kMq pic.twitter.com/VxjSPC2Uvo

    Room151 1 week ago

    Conrad Hall: ‘more sophisticated’ regulation needed for local government: The chair of the CIPFA/LASAAC Code Board has questioned the sophistication of financial regulation in local government and the continuing focus of the Department for Levelling Up,… dlvr.it/SSnPBV pic.twitter.com/G5d7JCWF8c

    Room151 1 week ago

    Slough Council approves plans to restructure finance department: Slough Borough Council has approved plans to restructure its finance department to enhance capacity and capability and to address a “significant weakness” in the function. The local… dlvr.it/SSf8DG pic.twitter.com/l5lmyHmkBg

  • Register to become a Room151 user

  • Previous story Editor’s blog: a crossroads for treasury
  • Next story Massive appeals threaten business rates pilots

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares