LGPS Central, a UK investment pool, has gained a “significant advance” in assets under management (AUM) as partner funds have appointed it to provide oversight and stewardship services for over £11bn (€13bn) in passive funds managed by Legal & General, previously overseen directly by partner funds.

With the £11bn mandate, LGPS Central now oversees more than £23bn across passive funds, including internally and third-party managed equity and fixed income strategies.

The additional AUM under the mandate also means the volume of assets the pool is responsible for is now over £43bn.

Prior to LGPS Central’s formation, six of LGPS Central’s partner funds, alongside Warwickshire Pension Fund, procured passive investment services from L&G.

The pool’s two additional partner funds maintained long-standing relationships with L&G, which collectively manages over £11bn in assets for LGPS partner funds.

Under the new agreement, effective from early January 2025, LGPS Central will oversee these funds on behalf of all eight partner funds, conducting semi-annual review meetings with L&G.

LGPS Central’s partner funds include Cheshire Pension Fund, Derbyshire Pension Fund, Leicestershire County Council Pension Fund, Nottinghamshire Pension Fund, Shropshire County Pension Fund, Staffordshire Pension Fund, West Midlands Pension Fund and Worcestershire Pension Fund.

Under the agreement, LGPS Central Limited will also vote on the underlying holdings in listed equity funds based on the company’s voting principles, an arrangement among LGPS pools that will align the voting decisions across partner fund equity holdings, significantly enhancing the pool’s stewardship and engagement impact on behalf of partner funds.

The Cheshire Pension Fund said the pass-through voting mechanism is “particularly innovative” granting LGPS Central significant influence over governance and sustainability matters by unifying the voting process.

Richard Law-Deeks, chief executive officer of LGPS Central, added that the agreement represents a “significant advancement” in the pool’s assets under stewardship, while supporting partner funds in “building on the historic joint procurement”.

He added that the collaboration sets a benchmark for stewardship and cost-effective management. “It amplifies our impact and ensures a unified approach to governance across all partner funds,” he said.

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