LGPS Central, a £14bn (€16bn) collaboration between nine UK local authority pension funds, has launched its first pooled private equity vehicle.
The fund closed on 31 January and raised money from five of LGPS Central’s pension fund clients, after six months of work on assessing the vehicle’s legal structure, obtaining regulatory approvals and building internal systems.
Omar Ghafur, investment director for private equity at LGPS Central, said: “Given that we started with a blank sheet of paper, and brought together the various parts of the organisation – investments, finance, legal, operations and compliance – to structure and launch this fund, I’m immensely proud we were able to conclude this process in such a short time frame.”
The LGPS Central Limited 2018-19 Vintage Private Equity fund sits on LGPS Central’s new private equity platform, which the company said would aim to raise and invest more than £2bn in the next few years as the pooling of local authority pension assets accelerates.
In a statement, the provider said the platform would support annual launches investing in “a mix of fund and direct” private investments “with a view to reducing the high external costs associated with private equity, thereby enhancing risk adjusted returns”.
Existing private equity strategies
The new launch caters for future investments into unlisted equities by the local government pension schemes (LGPS) for Cheshire, Leicestershire, Nottinghamshire, Staffordshire and West Midlands. LGPS Central did not disclose how much had been allocated by the five investors.
The five funds have existing private equity allocations totalling roughly £1.8bn, or just over 5% of their £34.8bn in total assets.
The other four LGPS Central clients not participating in the new private equity fund launch are the pension funds for Derbyshire, Shropshire, Worcestershire and the West Midlands Integrated Transport Authority. The latter two pension funds do not have allocations to private equity.
All together, LGPS Central’s nine clients run £44.3bn.
- Asset Managers
- Derbyshire County Council Pension Fund
- LGPS Central
- Local Government Pension Scheme
- Nottinghamshire County Council Pension Fund
- Private Equity
- United Kingdom
- West Midlands Integrated Transport Authority Pension Fund
- West Midlands Pension Fund
- Worcestershire County Council Pension Fund