Established in 2015, UK local authority pooling firm London CIV has shown consistent fee savings for its client funds, posting gross savings of £25m for the year up to March 2022.
The pool, which caters for the pension funds for the 32 London Boroughs and the City of London, has posted net savings of £18m and cumulative savings worth £54.5m, it announced in its annual review.
Mike Craston, chair of London CIV, said: “We are ambitious to achieve more savings and add more value, and work with client funds to achieve that.”
He noted that this does require “some compromise as we can only achieve economies of scale and leverage the combined scale of the London LGPS [Local Government Pension Scheme] if the size of our funds is maximised”.
He added: “We do understand the challenges involved as each client fund wants to make investment decisions based on their decisions about strategic asset allocations.”
London CIV has a target to offer funds that provide for the investment needs of 70% of the London LGPS assets by 2025.
“The current figure is 59% so we are well on the way although the figure varies between client funds,” said Craston.
During the period from March 2021 to February 2022 London CIV launched five funds, with responsible investment a key theme throughout and now has a total of six climate conscious funds.
“Our work to change three existing funds will take that to a total of nine which is about 50% of the portfolio,” Craston said.
The pool has also developed a strategic product roadmap for the next five years and, informed by client fund feedback, prioritised property funds for development.
“That will extend our private markets range which now includes five funds with a total of £2bn committed,” he added.