Chairman of the London Pensions Fund Authority (LPFA) Edi Truell is to advise the mayor of London on collaboration between local government pension schemes (LGPS) and infrastructure investment.
He will resign as chairman of the London public sector scheme and will set up an advisory board for the newly established partnership between LPFA and the Lancashire County Pension Fund.
The joint venture, called the London Lancashire Pensions Partnership (LLPP), was approved last month and Truell was instrumental in pushing forward the collaboration.
Truell, who also co-founded bulk annuity provider Pension Insurance Corporation (PIC), will now work as an unpaid adviser to mayor Boris Johnson on pensions and investments.
The idea is to push forward Johnson’s ambition to create a London infrastructure investment fund using assets from the capital’s LGPS.
Truell will also advise of LGPS consolidation, a long-term ambition of his and the LPFA as demonstrated by its involvement in LLPP.
Johnson firmly backs the merging of LGPS schemes in order to save on costs and create a combined fund that could invest in large scale infrastructure projects.
However, a previous attempt to push for this by proposing the idea in a national newspaper, Johnson came under fire for confusing funded and unfunded public sector schemes and inappropriately labelling large Dutch pension funds as sovereign wealth funds.
Johnson said Truell’s work leading the LPFA and moving it towards its partnership with Lancashire was a service to public finance.
“If we now use this new partnership as a blueprint for further pooling of pension funds, we could have a war chest worth hundreds of billions of pounds and access to the kind of investment opportunities which have until now been the preserve of foreign sovereign wealth funds,” he added.
The LPFA/Lancashire, which has combined assets of £10.5bn (€14.3bn), is aiming to commence operation in April 2016.
Both schemes will maintain separate governance structures, with oversight boards in both London and Preston, but merge investments, liability management and administration.