LGPS Central, one of the UK’s eight local government pension schemes (LGPS), has reported an increase in assets under management (AUM) to £29.9bn (€35.5bn), up from £26.4bn in the previous year.
Some £5.9bn of LGPS Central’s assets are invested in the UK, including £593m invested in UK private market investments, representing 24% of deployed capital, with over £2bn of committed funds available to make further investments.
The pool said that since the year-end, private markets commitments by partner funds have passed the £5bn milestone, with approximately £500m of investment proceeds already distributed back to partner funds.
It added that “substantial” further assets are managed within private market advisory mandates that now total £2bn, including £1.3bn in private equity.
The company’s third private equity vintage secured £210m in commitments from five partner funds, this has since grown to £315m in commitments after the year-end.
In April 2023, LGPS Central launched its first direct UK property fund, initially attracting £130m commitments from two partner funds. By March 2024, it said the fund had invested in three properties.
In addition to the direct UK property fund, the pool has a UK indirect property strategy with initial commitments of £80m focused on residential assets in the social, affordable and private rented sector and a global property fund is also in the pipeline.
LGPS Central said that as of March 2024 it uses its in-house fund management capability to manage over £10bn of its partner fund public markets investments internally, comprising £2.5bn in newly-launched mandates in UK government debt and £7.5bn in passive equity funds.
It added that collaborative efforts with partner funds will continue in 2024/25, with new fund launches, including buy-and-maintain UK corporate bonds and exploring opportunities in listed smaller companies and natural capital.
Cost saving
The pool said that to date it has saved partner funds £89m and it is projected to achieve £339.1m in savings by 2033/34.
It added that during the year it achieved a “major milestone” by reaching breakeven on investment cost savings for partner funds, with cumulative net savings at the end of the year standing at £15.5m and forecast to rise at a rate of £13.5m a year.
LGPS Central chief executive officer Richard Law-Deeks said, “As long-term investors we have focused on the steady growth and refinement of our offerings to deliver pooling solutions, ensuring a strong fund portfolio and value-add services.
“This approach helps us grow assets cost-effectively and build on our solid foundations to support the long-term future of the LGPS in the Midlands.”
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