Access
Services framework
Norfolk County Council has announced plans to create a framework agreement for the provision of legal services to LGPS funds and pools.
The council has published a prior information notice advertising a “concept viability event” to be held in London on 19 July.
The tender said: “This framework agreement will be for the provision of legal services to administering authorities of Local Government Pension Schemes (LGPS) and employer bodies within the respective funds on all aspects of the law and regulations applicable to them, including specialist advisers in pensions and investment law.”
Multi-asset managers
Hampshire Pension Fund is seeking up to three investment managers to supervise around £660m of multi-asset credit investments.
The mandate objective is to achieve a return of 3-5% above UK three-month Libor rate net of fees, over three and five year rolling periods.
A tender issued by the fund said the mandate’s corporate debt investments are expected to be largely sub-investment grade rated.
Border to Coast
Engagement manager
Border to Coast LGPS pool has appointed an international asset manager to encourage ethical business practices at investee companies.
The pool has selected Robeco to perform its voting and engagement services.
Robeco will vote at shareholder meetings on behalf of the pool and engage with listed company managers to encourage the adoption of environmental, social and governance (ESG) practices.
Rachel Elwell, chief executive of Border to Coast, said: “We are strong advocates of responsible investment and holding companies to account on environmental, social and governance issues.
“This is central to Border to Coast’s corporate and investment ethos, and a key part of delivering our partner funds’ objectives.”
Asset managers
Border to Coast has launched a tender process looking for asset management services for the pool’s UK equity fund to launch in Q4 2018.
The pool is asking for diverse investment styles, among them value, growth and smaller companies.
The fund will be aiming for a return of two percentage points above the FTSE ALL Share Index.
The tender follows a series of meetings in June held by the pool to outline expectations to asset managers like to participate in future procurement processes. Border to Coast met 130 asset management organisations.
Brunel
£6bn under management
Brunel Pension Partnership marked its first anniversary after being established by announcing it now has £6bn under management. The pool will eventually manage £30bn in assets from 10 local authority pension funds.
In April, Legal & General Investment Management became the pool’s passive equity fund manager.
Dawn Turner, chief executive of Brunel, said: “The selection of LGIM resulted from a rigorous and diligent search, and we are pleased to be passing them the funds that they will be responsible for in partnership with Brunel.
“As a company, Brunel Pension Partnership may now be a year old, but in practical terms this is just the beginning of looking after the investments that support the provision of pensions for almost 700,000 beneficiaries.”
ACS operator
Brunel Pension Partnership has appointed FundRock Management Company to operate the authorised contractual scheme (ACS) for its £7.5bn active equities portfolio.
The firm will be responsible for meeting regulatory requirements and contractual arrangements on behalf of the pool.
Brunel will have responsibility over fund management, although this will be delegated to investment managers.
Joe Webster, Brunel’s chief operating officer, said: “The model we’ve selected frees us up to focus on choosing quality managers and lets FundRock do what they are good at.”
Northern Pool
Custody provider
Northern LGPS Pool has appointed Northern Trust to provide custodial and administration services.
Among the services agreed are securities lending, private equity fund administration, compliance monitoring and carbon reporting.
This is not the first appointment for Northern Trust among the LGPS pools. In February Border to Coast also appointed the administrator.
London CIV
Fixed income fund
Four London boroughs have invested a combined £308m in a new fixed income fund launched by the London Collective Investment Vehicle (LCIV).
LCIV’s Multi Asset Credit (MAC) fund brings the total assets supervised by the investment manager to £15bn, more than 40% of pension fund assets controlled by London boroughs.
Larissa Benbow, LCIV’s head of fixed income, said the MAC fund would allow access to investments opportunities London boroughs have previously not had.
“The LCIV MAC fund offers London local authorities an excellent and cost-efficient way to access a broad range of credit strategies in a single product,” said Benbow.
Shareholder committee
A new streamlined committee to represent funds’ interests at the LCIV will include eight pension committee chairs and four treasurers.
In a letter to council chief executives, LCIV chief executive Mark Hyde-Harrison and John O’Brien, chief executive of London Councils, said that appointments would take effect from 1 August.
The new shareholder committee will replace the Pensions CIV Sectoral Joint Committee, which has representation from all 32 funds participating in the pool.
Karen Shackleton, senior adviser at asset management firm MJ Hudson Allenbridge, said LCIV expected to face “harder” governance challenges because of the number of funds involved.
Property portfolio
A London council pension fund has received a lukewarm response from the market after attempting to find investment managers for a proposed new property portfolio.
The Royal Borough of Kensington & Chelsea (RBKC) pension fund has been told the main obstacle is a requirement that the council’s investment committee retains the right to agree any property deals before they are signed.
Mercer, advisers to RBKC’s fund, consulted with five property managers, which followed a decision in February to increase the pension fund’s property allocation from 5% to 20% and the resignation of an in-house consultant.
Mercer’s report said the investment committee’s role was the big issue.
“This is the primary stumbling block, as the managers are reticent to put in place any agreement that might complicate matters from an operational standpoint and potentially impact costs,” said the report.
Transparency code
A London borough’s pensions chief called on all Local Government Pension Scheme pools to sign up to a new transparency code designed to help individual funds make better investments.
Andrien Meyers, head of treasury and pensions at London Borough of Lambeth, said that unless LGPS pools sign up to the code, local authorities will only see aggregate pool data reported by managers instead of information about the performance of their own investments.
Speaking at the Pensions and Lifetime Savings Association (PLSA) local government conference, Meyers said: “From a fund perspective it is vital that it is not just the managers that are signed up to the code, but also the pools that are signed up to it.”
Wales
Global equity funds
The Wales Partnership is awaiting regulatory approval for two global equity sub funds it hopes to have up and running by September — the pool’s first investment activity for Welsh local authority.
Anthony Parnell, treasury & pension investments manager at Carmarthenshire County Council — the host authority for the Welsh pool — said: “These are our first sub funds and it’s an important step forward in the pooling path.”
The sub funds account for approximately 20% of the Welsh pool’s total assets.
The first, the Global Opportunities Fund, will hold around £1.5bn in assets. The second, the Global Alpha Fund, will consist of approximately £1.9bn. The pool is aiming for a return of 2% per annum on both funds.
The funds are distinguished by each having a different mix of managers. These have been appointed but public announcements have been postponed pending regulatory approval.
The pool hopes to have sign-off from the Financial Conduct Authority in September and aims to transition assets in October or November.
The Wales Partnership is also working on further sub funds — UK equities and fixed income which it hopes to submit for approval in the autumn.
Parnell said: “We hope to keep up the momentum over the next couple of years.”
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