The Wales Pension Partnership (WPP) has announced the appointment of Link Asset Services as the FCA authorised Operator to establish and run a collective investment vehicle for the sole use of the eight local authority pension funds in Wales, with Russell Investments providing investment management and advisory services.
The WPP comprises the eight Welsh councils, which have combined assets under management of approximately £15 billion. The WPP is in the process of combining its assets following the UK Government’s requirement for local authority pension schemes in England and Wales to pool their assets by April 2018 in a bid to reduce investment related costs for scheme members.
Partnering with Link Asset Services, Russell Investments will provide investment advisory services to assist in establishing the investment vehicles, in consultation with the eight local authority funds. This will include advising Link Asset Services and WPP on efficiencies around portfolio construction which includes manager selection for the total pool of assets, excluding passive equity. Link Asset Services will also work with Russell Investments, where applicable, to further reduce costs through a multi-manager structure, currency management, portfolio overlays, transition management and other execution services.
Link Asset Services and Russell Investments worked in collaboration during the competitive tender process to deliver a proposal to meet the requirements of the WPP.
Peter Hugh Smith, Managing Director of Link Fund Solutions, part of Link Asset Services, said: “We are pleased to have been selected by WPP to facilitate the pooling of the assets of the eight existing local government pension schemes in Wales. The pooling of the assets into a collective investment vehicle means the constituent authorities will benefit from enhanced governance and the protection of a regulated tax transparent structure.”
Jim Leggate, Managing Director and Head of UK Institutional and Middle East at Russell Investments, commented: “The pooling of local government pension schemes provides the opportunity to deliver significant savings over the long-term, which will create additional value for scheme members. Through our 45 years of experience in managing investments for pension assets, we will look to deliver attractive risk adjusted returns and reduce implementation costs as the WPP seeks to meet future liabilities.
Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP): “The appointment of Link Asset Services, in partnership with Russell Investments, is a significant milestone in the establishment of a £15bn investment pool for the LGPS funds in Wales. We look forward to working together to deliver the benefits of investment pooling for the LGPS in Wales.”