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Private sector tie-up an option for confident Local Pensions Partnership

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Some private sector pension schemes have expressed an interest in potentially working with the Local Pensions Partnership (LPP), the company that will run the pooled assets of the London Pensions Fund Authority, Lancashire County Pension Fund and Berkshire Pension Fund.

The partnership does not yet meet the £25bn (€28bn) target the UK government set for the asset pools it has instructed UK local government pension schemes (LGPS) to form, but Michael O’Higgins, chair of the LPP, told IPE he was confident about the partnership’s future, and that there were several options for it to grow its asset base.

With Berkshire, the LPP asset pool would stand at around £13bn.

O’Higgins said the partnership was likely to bid to run investment management for the Welsh LGPS pool that has decided to outsource this function.

The ACCESS pool has also indicated that it intends to rent the regulated operator to manage its assets.

Other options for LPP to grow its assets under management towards the £25bn threshold, according to O’Higgins, are to sign up other public sector funded pension schemes or private sector funds.

Some private sector schemes have expressed an interest in working with LPP, he said.

LPP is keen to emphasise that it is not just an asset pool but a “pensions services organisation” that can offer investment management and other services to third-party pension schemes.

O’Higgins noted that LPP was further advanced than the other LGPS collaborations, as the pooling of assets will start at the end of this month.

“We’re up and running,” he said, adding that the partnership was focused on “moving forward” rather than worried about meeting the £25bn target.

LPP obtained approval from the Financial Conduct Authority for its investment management company in April, a process said to have taken around two years.

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