UK investment pools gaining critical mass

New reports state that UK investment pools created seven years ago, which were designed to streamline the investment processes regarding local government pension funds, are building sizable assets now while facing a range of challenges, including climate change and diversification reporting.

The local government pension schemes, commonly known as LGPS, are continuing to move funds, and the investment pools are still building up the number of asset classes they include. Experts consulting on LGPS anticipate that more funds will now be transferred to investment pools along with further asset class expansion.

A common case is for third-party managers to manage LGPS assets; however, the investment pool plays an integral role. Pools for the most part are driven by the objectives of partner funds. Local government pension funds share considerable commonality, and experts believe that the appeal of pooling is only set to increase. Today’s investment markets are both vast and diverse and, as a result, it is impossible for a single pension fund to cover every opportunity.

Collectively, there are 88 local pension funds based in Wales and England referred to as local government pension schemes. According to a 2022 report issued by the House of Commons, they represent one of Britain’s most defined benefit segments, with total assets worth £276 billion as of April 2020. Scotland has 11 local pension funds, adding a further £46 billion.

Investors in need of information and an expert opinion on funds often seek financial advice in Chester, Manchester and other major cities.

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