Spotlight on UK LGPS: LGPS Central takes phased approach as pool expands beyond £100bn

LGPS Central is taking a phased approach to expansion as it adjusts to a significantly larger pool, six new partner funds and an expanded role under the government’s Fit for the Future reforms.

The pool, which had around £53.4bn (€63.7bn) in assets at 31 March 2026, grew to £108bn on 1 April following the arrival of six partner funds from Brunel Pension Partnership and ACCESS: Gloucestershire, Hampshire, Norfolk, Oxfordshire, Suffolk and Wiltshire.

Chief executive officer Richard Law-Deeks says reaching more than £100bn was not part of a pre-existing strategy. Instead, Central’s original partner funds drove the decision to accommodate the incoming funds, which wanted the orphaned Local Government Pension Scheme (LGPS) funds to choose where they moved.

Managing growth

The scale of the change has made operational risk one of LGPS Central’s main priorities. Like other pools, it has adopted a phased approach, moving new business lines from design to operational implementation rather than introducing them simultaneously.

“If we’re not ready to do something, don’t do it. Don’t rush it,” Law-Deeks says.

The approach is intended to ensure Central and its partner funds are ready for the changes while limiting the risk that an operational problem affects the entire pool.

“Not everything’s being turned on at the same time,” he notes. “So if something does go wrong, it doesn’t go wrong for everyone.”

LGPS Central is still developing many of the processes required for its expanded role. Law-Deeks describes the current period as one of “growing pains”, as the pool balances ambition with pragmatism while bringing new responsibilities online.

New operating model

One of the biggest changes is LGPS Central’s move towards acting as principal investment adviser to its partner funds.

The reforms have also introduced responsibilities around implementation, including moving money between funds, while local investment represents another new area for the pool.

LGPS Central has consequently had to establish new teams, governance arrangements, processes and controls.

It is the only investment pool to have taken on funds from both Brunel and ACCESS. The expansion has exposed practical challenges arising from the different operating models inherited from the incoming funds, particularly around custody and reporting.

The destination is probably going to change significantly by the time we get there

Richard Deeks-Law at LGPS Central

LGPS Central’s partner funds use several custodians, requiring the pool to develop ways of consolidating data from different systems.

Law-Deeks acknowledges that the fund has “probably underestimated” the reporting challenges. The pool is using Microsoft Fabric as part of its work to address the data problem, although some current solutions are tactical rather than necessarily forming part of its eventual operating model.

Investment propositions

The increase in scale is also allowing LGPS Central to develop capabilities that would not previously have been viable. The pool has expanded its teams in areas including property and absolute return, partly to develop capabilities that partner funds previously accessed outside the pool.

It has also been able to attract more senior investment expertise. However, Law-Deeks says the question was not simply about building everything internally.

LGPS Central is considering where to develop its own teams, where to partner with other pools or asset owners, and where outsourcing makes more sense. Co-investment is one area where it sees significant potential.

“We think there’s real opportunity for us to get better returns and better value for our partner funds,” he says.

The pool is also interested in social housing and other opportunities where its greater scale could improve access to institutional investments.

Organisational growth

The expansion has required a significant increase in LGPS Central’s workforce, including recruitment from Brunel following its wind-down.

Around 10 people have joined Central from Brunel across investments, data and operations, according to Law-Deeks. Overall, the pool’s headcount increased from 89 at the end of March 2025 to 134 at the end of March 2026.

The challenge is to ensure the organisation’s culture develops alongside its scale. Law-Deeks says LGPS Central wants to retain its purpose-driven approach and connection to members while building a stronger performance culture as partner funds expect greater value from the expanded pool.

The pool remains headquartered in Wolverhampton and is not planning a major office expansion. However, Law-Deeks says it is open to a more regional model over time as its partner funds become more geographically dispersed.

Local investment

One distinctive element of the new pooling framework is that greater scale does not mean abandoning smaller, local investment opportunities, Law-Deeks stresses.

He says he is particularly “excited” about the prospect of investing in technology start-ups and smaller housing opportunities, describing these as the “most interesting stuff”.

Making such opportunities work for a pool of LGPS Central’s size presents a “challenge”, he adds. However, the reforms allow for a different risk-return profile for local investment, helping the pool retain a focus on opportunities that might otherwise become difficult to accommodate as it grows.

LGPS Central is developing approaches based on the maturity of local devolution arrangements. Where combined authorities are already established, the pool expects to work alongside the authority and pension fund. For funds without those structures, it is considering a more pooled or commingled solution, Law-Deeks explains.

Evolution, not revolution

Despite the scale of the changes, Law-Deeks is keen to stress that LGPS Central’s transformation should not be viewed as a single “end-state”. He repeatedly describes the process as an “evolution rather than a revolution”.

The pool is looking to international asset owners, particularly Canadian and Australian institutions, for lessons. These organisations have spent decades developing their models and have themselves changed direction along the way.

For LGPS Central, the next few years will be about continuing to develop capabilities while remaining flexible about the eventual model.

“The destination is probably going to change significantly by the time we get there.”

For now, the priorities are to minimise operational risk, bring partner funds into the pool and manage expectations around the pace of change, Law-Deeks says.