Thank you to the strategic partners of Brunel Pension Partnership

Transcription

1 Thank you to the strategic partners of Brunel Pension Partnership On the 18 th July the Brunel Pension Partnership ( Brunel ) formally incorporated its operating company the Brunel Pension Partnership Limited ( BPP Ltd ). Subject to FCA authorisation, BPP Ltd will act as the operating company for the management of the assets of the founding members Local Government Pension Scheme assets. BPP Ltd will provide a range of portfolios in which its clients can invest and will be responsible for selecting investment managers, monitoring performance and reporting. Eventually assets of some 28 billion will be under BPP Ltd s control. We are pleased to provide the following information about the organisations we chose to partner with and helped the Brunel Pension Partnership achieve a key milestone by establishing its operating company. Partner Organisation Alpha FMC Osborne Clarke PwC bfinance Key Capacity on project Lead financial markets advisor, covering operating model definition, Third Party Administrator/custodian selection, compliance and risk framework, FCA submission preparation. Lead legal advisor, covering advice across pensions, investment and public procurement disciplines Lead financial advisor, covering advice on structural options, defining financial business case, supporting with governance, recruitment and HR policy definition, IT requirements and evaluating tax issues Review of the investment proposition, which formed part of the full business case. BlackRock Analysis of potential asset transition costs to inform the February 2016 government submission. Eversheds Sutherland Hymans Robertson JLT Korn Ferry Moon Consultants Russell Investments Squires Patton Boggs Legal review on behalf of BPP Ltd of the shareholder and company documentation prior to formation and review of the LGPS admission agreement. Analysis and advice regarding the costs and risks of establishing pension arrangements for BPP Ltd staff Specialist project support in the development of the full business case, ongoing role leading the client side activities for pooling preparations Recruitment of BPP Ltd s Chair and Non-Executive Directors Recruitment of BPP Ltd s Board of Executive Directors Analysis of the potential spread of asset transition costs to inform the February 2016 government submission. Provision of educational sessions to on transition management and pooling. Analysis of the structural options in the initial feasibility study

2 Alpha FMC Alpha Financial Markets Consulting (Alpha) has been working with the Brunel Pension Partnership (BPP) over the last 9 months; Alpha s work has covered a wide range of areas to support the pool as it progresses towards April 2018 (the government pooling deadline). Alpha s role has taken a number of forms, from leading specific workstreams to providing input and insight into others. The pool s creation has led to BPP Ltd. being formed; Alpha s involvement has been focused on BPP Ltd. s role as an investment manager to the Brunel Pension Partnership Client funds. As such, Alpha has worked on the definition of the Operating Model components for their services to the Client Funds. Alpha led the identification and selection of the BPP Ltd. Third Party Administrator (TPA) and the common Custodian for the Client funds; both outsourcing arrangements will be fulfilled by the same firm. Alpha will continue to work with BPP Ltd. and the Client Funds to lead the on-boarding and transition activities with the chosen TPA. Alpha is also the lead on BPP Ltd. s Compliance and Risk framework, developing the necessary frameworks to ensure BPP Ltd. can provide the regulated and controlled services the Client funds require. This has involved the management of BPP Ltd. s preparation for requesting the relevant authorisation from the Financial Conduct Authority. Dawn Turner, Chief Executive Officer of BPP Ltd, commented, Alpha s extensive knowledge and expertise as Financial Market Consultants played a significant part in enabling Brunel to meet demanding timescales as well establishing a robust foundation for the future of BPP Ltd and the services it will provide to the pension funds. We look forward to our continued work with Alpha. Osborne Clarke Osborne Clarke has undertaken technically cutting-edge work across the pension, investment and public procurement disciplines, involving a large number of highly skilled experts in the firm. Over an extended period Osborne Clarke worked closely and collaboratively with the 10 Authorities responsible for the LGPS Funds that make up the Brunel Pension Partnership. Mark Womersley, Osborne Clarke Partner commented: Osborne Clarke is delighted to act as legal adviser to the new Brunel Pension Partnership. Creating from scratch a new investment pool of this size and substance for the 10 LGPS Funds has been a ground-breaking initiative. I m incredibly proud of the work that has been done by our highly skilled specialist lawyers. Osborne Clarke s team advised on a range of complex matters that required delivery against very demanding government timescales for the setting up of the new multi-billion pool of pension fund assets. The team was led by pensions Partner Mark Womersley, who was supported by corporate Partner Mark Wesker, investments Partner Helen Parsonage, public procurement Partner Catherine Wolfenden and employment Partner Julian Hemming, along with several specialist solicitors from within their teams. Further details can be found on the Osborne Clarke website here

3 PwC PwC has acted as BPP's lead financial advisor from the start and has brought a wide range of expertise to Brunel thus far, including advice on structural options, defining the financial business case including detailed financial projections and specifying operational costs, supporting with collaborative governance, assisting in recruitment and formulating HR policies, defining IT requirements and evaluating tax issues. Mark Packham, PwC Director, commented: PwC is proud to be lead financial adviser to the Brunel Pension Partnership. We ve undertaken a wide range of financial and related work since the Brunel Authorities started the project and it has been a pleasure to support the development of a clear and collaborative operating model. Further details are included in PwC's press release here bfinance Having worked with many of the funds behind Brunel on manager selection activities over the years bfinance was hugely pleased to assist Brunel with an independent review of its investment proposition. To our knowledge, this was the first independent review of an LGPS asset pooling business case. This analysis determined the potential fee savings that could realistically be expected in the relevant investment sectors as a result of asset aggregation, as well as prospective transition costs and other elements. bfinance was also involved in the design and refinement of the roster of sub-funds in which the constituent pension funds within Brunel would invest, ensuring that the structure would maximise efficiency while preserving the independence of the respective schemes. BlackRock BlackRock was approached by the Brunel pool directly to assist with the initial analysis of the potential transaction costs the pool may face. This analysis considered a range of potential costs based upon different manager selection assumptions. It included: Cost estimation analysis by each asset sub-class and in total for the pool Cost attribution by underlying Scheme Current asset manager and potential target manager analysis Analysis of how estimated costs changed given different manager choices BlackRock's Transition Management team is one of the leading specialists in the field. Covering all asset classes and global markets, the team has successfully serviced hundreds of clients since its creation in 1993 as one of the world s first providers of dedicated transition management services. For more information, please visit the BlackRock website here

4 Eversheds Sutherland In order to assist with the establishment of Brunel Pensions Partnership Limited, Eversheds Sutherland provided advice and assistance to the individuals who, once the company was established, would become the officers and/or directors of the company on the legal documentation for the company. This included reviewing and advising on the Articles of Association, Shareholders Agreement, Services Agreement and the terms of reference for the Audit, Risk and Compliance Committee and Remuneration Committee given the company s status as an FCA regulated company. Going forward, Eversheds Sutherland will be advising Brunel Pensions Partnership Limited in connection with documentation relating to its participation as an admitted body to the LGPS. Hymans Robertson Hymans Robertson, actuarial advisers to 4 of the LGPS Funds in the Brunel pool, provided analysis and advice to help determine the costs and risks of establishing pensions arrangements for BPP Ltd staff. Hymans also played a key role in implementing the preferred pension arrangements for BPP Ltd, in partnership with Wiltshire Council, one the participating Brunel Funds. JLT Since the Chancellor of the Exchequer s announcement in the Summer of 2015 for the English & Welsh LGPS Funds to form a limited number of asset pools for reasons that are now well publicised, JLT have been at the forefront of promoting collaboration and providing opinions to the LGPS on the structures that would satisfy the Chancellor s requirements. One of the first steps in helping the LGPS formulate their thoughts was the publication of our Local Government Pension Scheme Asset Pooling research report in January Further support came in the guise of providing specialist project support to the Brunel pool in assisting in the development of their FCA Business Case. A further project was commissioned to provide specialist support in the provision of a Client Side Project Lead. The overall project executive, Dawn Turner, had moved to working 100% of her time on the development of the Brunel company. It was recognised that the group of officers from the underlying LGPS in Brunel, whilst working to establish the pool, had limited capacity yet were still required to also focus on their day jobs. It was decided that they again needed a specialist consultant with a deep LGPS understanding to act as lead for the Client Side of the project. It was identified that JLT, in Nick Buckland, met with all of their requirements. Since May 2017 Nick has been spending, on average, 3 days per week, leading and co-ordinating the Client Side of the project and has regularly attended meetings of Officers, Councillors and Advisers in Bristol to help ensure that all of the tight deadlines have been met. A further extension to the support that Nick is providing has been agreed to assist in the development of the Brunel internal structures to ensure they meet with Brunel s client objectives. In addition to Nick s involvement, JLT have also introduced a business partner, Alpha FMC.

5 Korn Ferry Korn Ferry, the global executive search firm, was responsible for the candidate identification and recruitment process of the BPP Board Non-Executives. In conjunction with an advertising campaign that yielded an unprecedented number of applicants, Korn Ferry leveraged their network and expertise to uncover highly qualified individuals who identified with the culture and mission of BPP. Their efforts resulted in the swift appointment of Denise Le Gal as Chair, and Mike Clark, Frederique Pierre-Pierre and Steve Tyson as Non-Executive Directors. Korn Ferry helps leaders and organisations succeed by releasing the full potential of people through their full suite of talent strategy tools and consulting services. Korn Ferry s UK Asset Management and Board Search Practices have a strong track record in C-Suite and Boardlevel hires within the pensions and the broader financial services sectors. Moon Consulting Executive Search Firm Moon Consulting was engaged in May 2017 by Brunel Pension Partnership to undertake an extensive recruitment and search campaign for their new Board positions of Chief Executive, Chief Compliance and Risk Officer, Chief Investment Officer and Chief Operations Officer. Vanessa Moon, Director said I am delighted that all these individuals are now in post. This was a unique opportunity to help form the new executive board for Brunel Pension Partnership and we were honoured to have been awarded this very prestigious contract. For more information, please visit the Moon Consulting website here Russell Investments A major component of the initial submission to Government was a detailed analysis of the overall transition costs. Initially, Brunel chose to partner with Russell Investments to estimate the potential spread of costs that will be incurred when transitioning to the new Pool. Russell Investments are one of the leading global transition managers who have worked closely with many LGPS, delivering cost-effective and efficient implementation services including transition management, portfolio rebalancing, FX trading and currency management. The partnership with Brunel has also included a programme of educational sessions for each of the underlying authorities which have focused on the key elements of transition management and all the other major challenges requiring consideration when pooling assets. Two such areas that resonated with the authorities were the optimisation of the portfolios to ensure efficient management and how to manage the complexities associated with the use of multiple managers. Squires Patton Boggs Squire Patton Boggs provided expert analysis of the structural options in the initial feasibility study stages of creating the pool and provided legal advice to the funds on the procurement, financial services and local government law issues.