Published: September, 2022
Midlands-based Local Government Pension Scheme (LGPS) Pool, LGPS Central, has published its 2021/22 annual report, showing that assets continue to be pooled positively by its eight Partner Funds, reaching a total of £28.5billion of assets under stewardship (comprising investments in pooled products, advisory and discretionary mandates), with achieved cumulative net investment cost savings on launched products amounting to £42.8million as at 31st March 2022.
As of 31 March 2022, total assets under stewardship were 51.6% of Partner Fund AUM (Assets Under Management) (31 March 2021: 44.8%). Pooled products as a percentage of total Partner Fund AUM represented 34.7% (31 March 2021: 26.9%), while AUM under discretionary and advisory agreements stood at a further 16.9% (31 March 2021: 17.9%).
Annual net investment cost savings for Partner Funds are now positive and accelerating with an anticipated cumulative breakeven point in 2023/24. With more funds in the pipeline, LGPS Central remains on track to deliver net cost savings in excess of £250million for Partner Funds by 2034.
The Company has seen pleasing additional contributions into pooled vehicles from its Partner Funds. A particular highlight has been the commitment of £2.9billion during the year to newly launched Private Market funds. Since March 2022, LGPS Central has launched a £1billion Global Sustainable Equity Fund, with commitments from four of its Partner Funds. More products are in the pipeline including Private Debt, Property and Targeted Return funds.
Chief Executive, Mike Weston said, ‘We have continued to build on the strong foundations of the Company, ensuring we deliver on our promises to our Partner Funds and their scheme members. We continue to progress our mandate of encouraging further transitions to the Pool and the savings that brings. I have a firm belief that our potential benefit to our Partner Funds should go beyond purely economy of scale savings, by drawing together individuals with the depth and breadth of skills that we have, will see us drive positive investment performance over the long term. In the creation of a robust, forward-looking Company, we ensure we are well positioned to respond to the next stage of Pooling in the UK’.
Responsible Investment remained a dominant theme throughout the year with a confirmed commitment to Net Zero, market-leading climate reporting, an active role at COP26 and retention of the Pool’s proprietary Responsible Investment Integrated Status (RIIS) across all products. Engagement remains an important part of the LGPS Central strategy, especially on matters of climate change, deforestation, plastic pollution, and human rights.
The year saw the Company establish itself in the recently completed i9 building, in Wolverhampton city centre. The new offices provide an environment suitable to develop its skilled and diverse workforce of circa 70 people, and at the year-end, 41% of the Central team were from BAME (black, Asian and minority ethnic) backgrounds.
The full Report & Accounts document can be found on the LGPS Central website.
