UK public pension pool names corporate bond managers
LGPS Central has selected Fidelity and Neuberger Berman from over 70 fund managers bidding to run a global investment grade corporate bond fund for the UK public pension pool.
The two managers will be responsible for half of the mandate each. LGPS Central did not disclose the size of the total mandate, but in November it tendered for a £2bn (€2.2bn) fund.
Gordon Ross, investment director for fixed income at LGPS Central, said it chose Fidelity and Neuberger Berman “because of their global reach as well as their strong presence in the UK”.
“It’s clear they follow robust processes that are repeatable across all credit markets,” he added. “We’re certain they will help us to ensure our partner funds’ investment objectives are met.”
LGPS Central was set up to pool the assets of nine local government pension schemes based in the Midlands. They have around £44bn in assets under management collectively, with LGPS Central currently responsible for advising and managing around £20bn of this total.
“We’re certain [these managers] will help us to ensure our partner funds’ investment objectives are met”
Gordon Ross, fixed income investment director, LGPS Central
Last month, the pool launched a private equity platform targeting £2bn. In January it named three emerging market equity managers for a £1.5bn mandate, and last year it launched a £2bn global active equity fund.
Around a quarter of the £274.6bn assets held by local authority pension funds in the UK are now pooled in some form. A recent consultation paper from the government set out a new “deadline” for pooling of 2020, after which all new investments by individual pension funds must utilise one of the pools, with few exceptions.
LGPS pooling: Funds under pressure to comply
A consultation paper sent out by the Ministry of Housing, Communities and Local Government in January to LGPS funds has heightened tensions between policymakers and pension funds, reports Nick Reeve