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Local Pensions Partnership plans upgrade to support expansion

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The £12.8bn (€14.3bn) Local Pensions Partnership (LPP) is looking to hire a consultant to help it implement changes that would make its operating model more robust and scalable.

The partnership between the London Pensions Fund AuthorityLancashire County Pension Fund and Berkshire Pension Fund wants to bring in new clients in the next few years, a spokesman indicated.

It plans to upgrade the systems and processes supporting its regulated investments business, LPPI, and to outsource its middle office function. As part of this, it has launched a tender for a consultant to help with the selection and implementation of portfolio management systems.

The consultant would also help implement an operating model based on an outsourced middle office.

“The middle office workstream will deliver an enhanced investment operations process, preparing the model for additional clients, instrument and investment types and client reporting needs,” the tender document stated.

Middle office tasks include trade processing, reconciliation and data management, an LPP spokesman explained.

“This is about planning for the next three to five years, during which period our expectation is that we will broaden our client base across a number of areas in parallel to adding further investment and risk management capabilities,” he said.

“This is about planning and ensuring we are ahead of the curve… We need to have a robust, resilient and scalable operating model to support our existing clients as well as any new ones.”

LPP launched the tender after carrying out a review of its investment operations systems and processes.

According to the tender notice, the review found that LPP could implement changes to its current model “to improve operational risk resilience and delivery of regulatory compliance”.

The tender document stated that LPP was seeking specialist support because it recognised its internal resources did not have the capacity or market expertise to deliver on the recommendations of the review.

LPP is the collaboration between the London Pensions Fund Authority and Lancashire County Pension Fund. Berkshire Pension Fund is joining LPP, which is due to manage its assets from 1 April. LPP has launched four pooled funds for its members to date. 

The value of the LPP consultancy contract is estimated at £1.1m, according to the tender notice.

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