Local Pensions Partnership Investments (LPPI) has delivered £153.2m in savings for its members since it launched. In the last year, the pool delivered savings of £40.2m, up from £39.1m the previous year, it revealed.
The announcement comes as the Department for Levelling Up, Housing and Communities’ Local Government Pension Scheme (LGPS) consultation reveals that since the implementation of pooling the LGPS has achieved net savings of £380m, to 31 March 2022.
LPPI’s net cost savings for the same period amounted to £113m, equivalent to 30% of the total LGPS figure. This is despite LPP’s share of total LGPS pooled assets under management being 6%.
The pool expects a similarly high contribution to savings compared to pooled assets under management for the year to 31 March 2023.
The improved savings results meant that LPPI now expects to deliver net cost savings of £200m by 2025, it added.
According to LPPI’s annual report, the organisation pooled 100% of client fund assets under a whole scheme management model which provides access to attractive investment in a cost-effective manner and increasing buying power to negotiate fund manager discounts.
Chris Rule, chief executive officer at LPPI, said: “We have been able to realise sector leading cost savings and performance largely due to having pooling scale from the outset. By managing all of our clients’ assets under a delegated model we’ve benefited from scale, flexibility and agile decision making since inception.”
He added: “But importantly, our partner funds don’t lose control – they retain sovereignty of their fund’s strategic asset allocation while we provide expert advice and a focussed range of asset class options.”
Rule said there should be more cross-pool collaboration in the market, which would involve funds having more flexibility to invest through their own pool or in another pool’s investment vehicle, as suggested by the government’s consultation.
He said that direct investment into other pools would also remove the need for feeder funds and the associated costs.
He noted that LPP’s partner funds have already benefitted from the pool’s involvement in two significant cross-pool collaborations – GLIL Infrastructure and the London Fund.
“These collaborations have allowed us to achieve fantastic results alongside other pools and funds, and we’re always talking to our clients, partners, and peers to find new ways of working together,” he said.
Yesterday, ACCESS Pool published their results, showing that the pool delivered £98.9m gross savings, and £71.4m in net savings.