The London Pensions Fund Authority’s (LPFA) £10bn (€13.6bn) joint venture with the Lancashire County Pension Fund (LCPF) has announced several board members, including the former head of BP’s pension fund, as it pushes ahead with the launch of its first sub-fund.
Peter Rogers, Robert Vandersluis and Sally Bridgeland were named non-executive board members of the re-branded Local Pensions Partnership (LPP), as the venture was granted regulatory approval by the Financial Conduct Authority (FCA).
It said it chose its new name to reflect its “readiness to partner with other [local authority] funds”.
Bridgeland and Vandersluis bring with them significant pensions experience, as former chief executive of BP Pension Trustee and director of global pension investments at pharmaceutical GlaxoSmithKline (GSK), respectively.
Bridgeland will chair LPP Investment, one of two companies created by the partnership, while Vandersluis will chair the LPP’s risk committee.
She told IPE the company, as of the beginning of April, employed the in-house investment teams of both the LPFA and the LCPF, including its respective CIOs Chris Rule and Mike Jensen.
She likened LPP Investment’s role to that of BP Investment Management, her former employer’s in-house manager regulated by the FCA.
“The pension funds will still have their governance [structures], and the investment company is the service provider to those pension fund trustees,” she added.
First assets to be pooled
While Bridgeland would not be drawn on the first sub-fund to be launched by LPP Investment, a spokesman said the two schemes would at first pool equity holdings.
At the end of March 2015, the LCPF had £2.5bn in externally managed equity.
Five external equity managers – Baillie Gifford, MFS, Morgan Stanley, NGAM and Robeco – were responsible for the majority of assets, while two UCITS funds managed by AFG and Magellan Financial Group held £504m.
The LPFA had a total of £1.5bn in equity holdings, of which £921m was managed by MFS at the end of March last year, with smaller mandates overseen by Sarasin and Partners and Insight.
Nearly £420m was managed through an in-house buy-and-hold strategy in March 2015 – a figure that increased to £600m by the time of the publication of the 2014-15 annual report.
The venture has also set up a standalone administration company, LPP Administration, chaired by Rogers.
He currently chairs New West End Voice, a business group representing the interests of retailers in the centre of London, and is a former chief executive of Westminster City Council and the London Development Agency.
The three appointments come despite the two local government pension schemes’ (LGPS) failure to surpass the critical £25bn asset threshold desired by the Department for Communities and Local Government for the creation of one of six LGPS asset pools.
The venture now has until the summer to find additional partners.
It is likely to collaborate with the £35bn Northern Powerhouse pool being launched by the Greater Manchester Pension Fund, Merseyside Pension Fund and West Yorkshire Pension Fund.
Michael O’Higgins, LPP’s chairman, said he was “delighted” the venture could now move forward as an accredited entity.
“FCA approval is the cornerstone of our drive for good governance in LGPS reform and an essential part of our formation,” he said.
“And our new name underlines the fact we are open for business, and ready and able to work with other LGPS funds in developing this exciting proposition.”