Inflation is the biggest concern for the funds managed by Local Government Pension Scheme (LGPS) professionals in England and Wales, according to a survey from investment manager Alpha Real Capital.
Fifty-eight percent of respondents identified inflation as their top concern, followed by longevity (19%), affordability of future accrual (14%) and geopolitics (9%). In total, 100 LGPS fund professionals responded to the survey.
Shajahan Alam, CDI director at Alpha Real Capital, said: “A higher inflation world is a very plausible scenario going forward. In such a scenario, many assets can struggle to perform.”
The survey also showed that 53% of respondents cited the target for their investment portfolio post-valuation would be an “inflation+” goal (based on the Consumer Price Index), whereas 47% cited “gilts+” as their benchmark.
This followed news on Wednesday (18 May) that CPI inflation in the UK had reached a 40-year high of 9% in April, according to figures from the Office for National Statistics.
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