The Lancashire County Pension Fund (LCPF) has made 53 appointments to its investment consultancy framework as the local government pension scheme (LGPS) gears up for its new partnership.
The £5.3bn (€7.4bn) scheme for public sector workers in Northwest England is in the process of creating an “asset-liability partnership” with the £4.8bn London Pensions Fund Authority (LPFA), resulting in the need for investment advisory services.
As it begins to shift assets into the collective fund with the LPFA, it has hired consultants to a framework agreement covering public equities, credit, infrastructure, real estate, private equity, governance, risk management and macroeconomic analysis.
It hired Allenbridgeepic Investment Advisers, Aon Hewitt, bfinance, CBRE Global Investment Partners, Hymans Robertson, Institutional Investment Advisers, JLT Benefit Solutions, Mercer, Redington, Russell Investments, PwC and Stepstone Group across 53 different arrangements. (see table)
|Public Equity||Credit||Infrastructure||Real Estate|
|Allenbridgeepic Investment Advisers||Allenbridgeepic Investment Advisers||Allenbridgeepic Investment Advisers||Allenbridgeepic Investment Advisers|
|Aon Hewitt||Altius Associates||Aon Hewitt||Aon Hewitt|
|JLT Benefit Solutions||bfinance||Institutional Investment Advisers||CBRE Global Investment Partners|
|Mercer||Institutional Investment Advisers||JLT Benefit Solutions||JLT Benefit Solutions|
|Russell Investments||JLT Benefit Solutions||Mercer||Mercer|
|Mercer||Russell Investments||Russell Investments|
|Redington||Stepstone Group||Stepstone Group|
|Private Equity||Governance||Risk Management||Macroeconomic Analysis|
|Allenbridgeepic Investment Advisers||Allenbridgeepic Investment Advisers||Aon Hewitt||Aon Hewitt|
|Altius Associates||Aon Hewitt||JLT Benefit Solutions||JLT Benefit Solutions|
|Aon Hewitt||Hymans Robertson||Mercer||Mercer|
|JLT Benefits Solutions||PwC||Redington|
Launching the tender in December, Lancashire County Council said it would review various aspects of the fund’s investments and conduct mini-competition exercises as and when required, appointing the most “economically attractive” consultant.
This is the second framework agreement LCPF has set up to manage its “partnership” with LPFA, after announcing the winners for a transition management model last month.
The pension fund will use BlackRock Advisors, Citigroup, Goldman Sachs, Legal & General Investment Management, Macquarie Capital, Nomura, Northern Trust and Russell Implementation Services, using a similar mini-competition model when required.
The LCPF and LPFA announced the new partnership last year with the view to pooling investments, cutting costs and improving governance.
Both funds have internal asset management capabilities that will now merge, alongside liability management strategies and administration.
The partnership came as the UK government considered responses to a consultation on whether to create collective investment vehicles (CIVs) for the 89 LGPS funds in England and Wales, potentially forcing all funds to invest only in passive listed assets.
Both the LCPF and LPFA suggested increased fund collaboration on governance and liability management was more appropriate than a mandatory shift to passive investing, and a focus solely on investment fees.
A government response has been delayed and is now expected after May’s general election, due to friction within government departments.
Some LGPS funds with internal asset management capabilities are considering legal action against the UK central government should it force schemes to invest via CIVs.