LGPS Central, the asset management company set up to manage £40bn (€45bn) on behalf of nine UK public pension funds, plans to launch three equity sub-funds in April after gaining regulatory approval.
The company will also be developing propositions for alternatives this year, it has said.
Yesterday, the company announced it had received regulatory authorisation from the Financial Conduct Authority, which means it can go ahead and provide a range of investment services to its clients. The UK government wants the eight “pools” set up by local government pension schemes (LGPS) to start managing assets from April this year.
Joanne Segars, chair of LGPS Central, said: “We are firmly on track for the launch of the company and the transition of assets to our first ACS [authorised contractual scheme] sub-funds in April.
“We have also in place detailed plans for the launch of new sub-funds, products and services for our partner funds during the rest of 2018-19 and beyond.”
A spokeswoman for LGPS Central told IPE that the first three funds to launch, in April, would be UK passive equities, global passive ex-UK equities, and global dividend growth equities.
These will be followed by two further global equity funds in September, followed by a global emerging markets fund and a UK active equity fund in October.
There are plans for the regular launch of further sub-funds throughout 2019 and 2020, according to the spokesperson. Three funds already earmarked for launch in the first quarter of next year are UK fixed interest, UK index-linked bonds, and corporate bonds.
LGPS Central also has plans to launch other services for its investors including derivatives management.
The pooling of public sector pension assets was mandated by the government in a bid to create larger investors capable of meaningful investment in infrastructure, as well as reduce overall costs.
The LGPS Central spokeswoman told IPE the alternatives markets were particularly important for the manager.
“It is in these markets that we see the greatest opportunity to drive cost savings for our partner funds,” she said. The company would therefore be developing its product and service proposals in these markets during 2018.
LGPS Central will manage the assets for nine LGPS funds from across the ‘centre’ of England, with around 900,000 members and 2,000 participating employers.
The participating pension schemes are: Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands and Worcestershire.
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