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South Yorkshire boosts Border to Coast asset pool's in-house expertise

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South Yorkshire has joined the proposed Border to Coast local authority asset pool, further boosting the collaboration’s in-house management.

In a statement, the £6.5bn (€8.8bn) South Yorkshire Pensions Authority (SYPA) said talks in recent weeks had confirmed the asset pool and South Yorkshire “share the same long-term vision and values”.

It highlighted that the collaboration would allow it to “continue to reap the low cost and high returns” stemming from its current internal asset management overseen by John Hattersley, SYPA’s fund director.

SYPA’s decision to join the asset pool – launched by the local authority funds for East Riding, Cumbria and Surrey late last year – boosts the number of participating funds by four over as many weeks.

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The £6.4bn Tyne & Wear Pension Fund, administered by South Tyneside Council, confirmed its decision to also join the asset pool to IPE, and both the £2.3bn North Yorkshire Pension Fund and the £1.6bn Lincolnshire Pension Fund agreed to back the arrangement earlier this month.

The addition of SYPA, however, significantly boosts the pool’s internal capability, coming in addition to the £2.4bn managed internally by East Riding Pension Fund.

Hattersley could not be reached for comment, but SYPA’s most recent annual report said all investments were managed internally, both for the £6.2bn South Yorkshire Pension Fund and the £212m South Yorkshire Passenger Transport Pension Fund.

For the 2014-15 financial year, SYPA achieved a return of 14.2%, marginally below its benchmark, while its annualised 10-year return was, at 8.6%, 0.1 percentage points above target.

In total, nine local authority funds have now declared their support for the Border to Coast arrangement, boosting the pool’s assets to £27bn.

There are currently eight asset pools emerging following talks between the 89 local government pension schemes (LGPS) across England and Wales, triggered by a desire from central government to create half a dozen asset pools, branded British Wealth Funds by chancellor of the Exchequer George Osborne.

The eight Welsh LGPS are expected to launch a standalone pool, while seven have emerged in England – including the already operational London CIV, and the partnership announced between the London Pensions Fund Authority and Lancashire County Pension Fund.

Despite its size, Border to Coast is not the largest but is currently behind a £35bn pool including the West Midlands Pension Fund and a £40bn arrangement comprising Greater Manchester Pension Fund and the schemes for West Yorkshire and Merseyside.

The pools have until 19 February to submit consultation responses to the Department of Communities and Local Government.

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