The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh local authority pension funds, has launched a series of fixed income funds on its existing authorised contractual scheme (ACS) platform.
The new pooled investments will comprise five sub-funds focused on global credit, global government bonds, absolute return bonds, multi-asset credit and UK credit.
Apart from UK credit, the sub-funds will be managed by Russell Investments and utilise a range of generalist and specialist fixed income managers to deliver enhanced risk-adjusted returns.
WPP said the single-manager UK credit strategy would launch with £550m (€597m) while the four sub-funds managed by Russell Investments ranged in size between £430m and £780m. All eight of the Welsh pension funds would be investing in at least one of the sub-funds.
Link Fund Solutions, which was appointed by the WPP as its authorised operator in 2018, is responsible for creating and operating the new fixed income platform structure. Russell Investments was appointed at the same time for investment advice and manager selection. With the launch of the fixed income platform, Russell is now responsible for managing £5.2bn of WPP’s assets across equities and fixed income.
Councillor Glyn Caron, chair of WPP’s joint governance committee, said: “As investment markets become more complex, we recognise that more sophisticated investment solutions are needed to meet the long-term objectives of our eight constituent authorities.
“Working with Russell Investments and Link Fund Solutions, we believe these funds will provide us with the ability to optimise our exposure to fixed income markets while delivering on our objectives to improve diversification and reduce our costs.”