Bromley Pension Fund has voted to remain in London CIV (LCIV) and will transfer its global equity investment with Baillie Gifford to the Local Government Pension Scheme pool “within a month”.
The pension fund, which has over 19,000 members and net assets of £1.3bn, told Room151 in January that a “key decision” will be made at a meeting of Bromley Council’s Pension Committee on 22 February, which could involve withdrawal from its membership of LCIV. This followed concerns from Bromley that the pension pool was not delivering “value through pooling”.
However, following a meeting of Bromley’s Pension Committee on 13 March, the fund has decided against leaving LCIV.
Keith Onslow, chairman of Bromley’s Pension Committee, told Room151: “We’ve now agreed to stay within the LCIV and the reason for it wasn’t so much government pressure or the current state of the legislation.
“It was really that Dean Bowden [LCIV’s CEO] coming into the pension pool has put a whole new perspective on things. He has delivered more, or is likely to deliver more, in six months than many others have delivered in six years.”
Bowden started ticking off the concerns that I had, concerns for example around governance, concerns around delivering fees savings and what he was proposing to do to improve fund performance.
Pooling Baillie Gifford investment
Bowden was appointed as CEO of LCIV in December 2022 in succession to Mike O’Donnell. Onslow stated that on appointment, Bowden has made “some strides” in delivering “value out of pooling to the extent that we’re now actively looking at transferring, probably our largest fund over to the LCIV”.
He stated that Bromley Pension Fund is now planning to transfer its Baillie Gifford investment over to the LCIV “within a month”, which represents a “significant chunk” of the fund at around 40%.
Onslow added that the decision to start transferring assets to LCIV only followed in-depth conversations with Bowden over the past month about his concerns regarding pooling.
“He [Bowden] came down [to Bromley] probably without seeing any previous correspondence that has gone on between me and the LCIV over the last five or six years. And he started ticking off the concerns that I had, concerns for example around governance, concerns around delivering fees savings and what he was proposing to do to improve fund performance,” Onslow added.
Peter Turner, Bromley’s director of finance, added to Onslow’s comments by suggesting that Bowden’s approach is very “customer-driven”, which influenced the fund’s decision to stay in the LCIV.
He told Room151: “[They] need to do what [their] customers want. I think that feels very evident. It almost feels like the organisation had become too concerned about itself, it has lost its focus on the customer, and I think we’ve seen evidence he’s [Bowden] moved it in a positive way.”
It was really that Dean Bowden [LCIV’s CEO] coming into the pension pool has put a whole new perspective on things. He has delivered more, or is likely to deliver more, in six months than many others have delivered in six years.
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Conversations with government
Alongside conversations with London CIV, Onslow also highlighted that since January the fund has had “constructive discussions” with the government over its withdrawal from the pool.
He said: “We’ve had conversations with the government, and they have been very constructive. They have made plain that they would like to pursue pooling, I mean, that came out in the Budget.
“But the conversations have been very constructive and when it [the decision to remain in London CIV] went to our pension committee, although the law was a great consideration, the decider was, in fact, what Dean Bowden was proposing to deliver at the LCIV.”
This comes as the Royal Borough of Kensington and Chelsea had also voted to remain in LCIV after suggesting that it was “preparing to exit” at the beginning of the year.
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