Local Pensions Partnership Investments (LPPI) has increased its annual net cost savings by more than £10m this year, bringing cumulative savings since its launch in 2016 to £113m.
LPPI is the investment management subsidiary of Local Pensions Partnership (LPP), one of the eight Local Government Pensions Scheme (LGPS) pools. It reported that its annual net cost savings have risen from £28.2m to £39.1m in the year to 31 March 2022.
LPPI outlined that the key drivers that improved its savings figures were asset pooling, growing assets under management, lower fees negotiated with external managers and an expanding portfolio of direct investments.
Chris Rule, LPPI’s and LPP Group’s CEO, said: “LGPS pension pooling was sparked by the belief that public pension funds working together can achieve greater scale to access improved opportunities for investment and create costs savings, whilst at the same time ensuring the future pensions for millions of workers across the country are secure and affordable. LPPI’s cost savings and performance demonstrate that pooling can and is working.”
The increase in savings means LPPI has revised its projections and is now expecting to deliver net cost savings of more than £200m by 2025, more than £350m by 2030 and more than £500m by 2035.
In total, LPPI has launched eight investment funds, pooled 100% of its client fund assets and has £23.6bn of assets under management.
“Understanding the impact that pools are having on LGPS pension portfolios is crucial in keeping the original pooling objectives alive and enabling further innovation and an acceleration to fully realise the benefits for which pooling was intended,” Rule added.
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