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Welsh public pension funds seeking £13bn asset pool manager

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The eight public pension funds in Wales are seeking a third party to run a collective investment vehicle (CIV) as part of the UK’s push to pool public pension assets.

The Welsh pool, with assets of more than £13bn (€15.4bn), issued a tender at the end of December for external managers to run the majority of its investments.

In its tender notice, Flintshire County Council, one of the eight councils backing the pool, said: “The authority anticipates that ‘additional services’ may include the ability to provide investment vehicles for the sole use of the Welsh pool; securing fee savings; advising on the addition of sub-funds; managing transition activity; manager monitoring, research and selection; enhanced performance, risk reporting; [and facilitating] tax advice related to vehicle selection.”

The Local Pensions Partnership (LPP) – a collaboration between the London Pension Fund Authority and Lancashire County Pension Fund – is likely to bid for the contract.

LPP chairman Michael O’Higgins told IPE last year the organisation was interested in offering its services.

Last year, the eight funds selected BlackRock to run £2.6bn of passive funds, with State Street Global Advisors and Legal & General Investment Management losing mandates.

Another UK public pension pool, known as ACCESS, is also set to tender for a third-party provider.

Other pools, such as LPP and the London CIV, have built their own infrastructure.

The Central and Brunel pools are understood to be planning self-built models.

Elsewhere, the £11.5bn West Midlands Pension Fund has awarded a proxy-voting mandate to PIRC.

PIRC will provide analysis and advice relating to the pension fund’s direct equity holdings, according to a contract award notice posted by Wolverhampton council, which administers the pension fund.

At the end of March 2016, West Midlands managed £5.3bn of listed equities in house, roughly 45% of its total portfolio, according to its latest annual report.

The in-house team runs UK, US, European, Pacific and Japanese equities.

The West Midlands Pension Fund is part of the Central pool, combining its assets with those of seven other pension funds to create a collaboration worth more than £34bn.

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