LGPS Seminar No. 2 - Investment Pooling Update A Joint AREF / IPF Seminar

Transcription

1 LGPS Seminar No. 2 - Investment Pooling Update A Joint AREF / IPF Seminar Tuesday 21 March 2017 Chair: John Forbes, John Forbes Consulting LLP Speakers: Melville Rodrigues, Partner, CMS Cameron McKenna LLP David Walker, Head of LGPS Investments, Hymans Robertson Panel: Jeff Houston, Head of Pensions, Local Government Association Richard Tomlinson, Investment Manager, Lancashire County Pension Fund

2 Update on LGPS pooling AREF/IPF Seminar David Walker Head of LGPS Investments March 2017 Hymans Robertson LLP is authorised and regulated by the Financial Conduct Authority

3 Criteria for pooling SCALE 2 Addition of a 5 th criteria?

4 The Pooling landscape Borders to Coast ( 2.7bn property) Northern Funds ( 1.4bn property) Wales ( 0.7bn property) Central ( 2.2bn property) ACCESS ( 3.1bn property) London ( 1.9bn property) Brunel ( 1.6bn property) 3 Lancs/LPFA ( 0.9bn property)

5 Understand the pooling model POOL Fund 1 Joint Governance Committee Investment Committee Managers (internal/external) Fund 2 Operator Fund 3 Pooled vehicle(s) Other service providers Assets Assets Assets 4 Who are the decision makers?

6 Impact of pooling model 5

7 MANAGERS Levels of decision making Growth Equity Alternatives UK / global Active / passive Hedge Funds Diversified growth Infrastructure Strategy Income Real estate Debt strategies Index-linked 6 Protection Fund decision vs Pool decision Corporate bonds FI govt. bonds LDI

8 Entering the pool without making a splash Fund Pooled vehicle One key aim of pooling is cost savings Transition costs could wipe out savings or push out pay back period Example: Global equity to equity transition with low commonality could cost 5 years plus of savings Co-ordination within and across pools has potential to reduce costs 7

9 Keeping tabs on progress Government already asking for progress updates Evaluating against July submissions costs and savings Collating required information will be complex 8

10 Next steps for pools Governance focus Inter authority agreements for decision making Investment fund options Sub funds to set up for each asset class or strategy Procurement Legal advice Transition services Manager selection 9

11 Timeline for change ? Planning Transition Keeping on target Agree pool structure Project planning Procure required services Governance framework and joint policies Pooling vehicles up and running FCA sign off Efficient transition of assets Build up new allocations Pool structures delivering Adapt to client demands Growth in knowledge and expertise 10

12 Thank you The material and charts included herewith are provided as background information for illustration purposes only. It is not a definitive analysis of the subjects covered, nor is it specific to circumstances of any person, scheme or organisation. It is not advice and should not be relied upon. It should not be released or otherwise disclosed to any third party without our prior consent. Hymans Robertson LLP accepts no liability for errors or omissions or reliance upon any statement or opinion. Copyright 2016 Hymans Robertson LLP. All rights reserved 11

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26 Important Notice CMS Cameron McKenna LLP accepts no responsibility for loss arising from any action taken or not taken by anyone using these slides. The information in these slides is intended to provide only a general outline of the subjects covered. It should not be regarded as comprehensive or sufficient for making decisions, nor should it be used in place of professional advice. The information in these pack will have been supplemented by matters arising from any oral presentation by us, and should be considered in the light of this additional information. If you require any further information or explanations, or specific advice, please contact us and we will be happy to discuss matters further. Melville Rodrigues Partner, CMS T E melville.rodrigues@cms-cmck.com

27 LGPS Seminar No. 2 - Investment Pooling Update A Joint AREF / IPF Seminar Chair: John Forbes, John Forbes Consulting LLP Speakers: Melville Rodrigues, Partner, CMS Cameron McKenna LLP David Walker, Head of LGPS Investments, Hymans Robertson Panel: Panel Discussion/Q&A Jeff Houston, Head of Pensions, Local Government Association Richard Tomlinson, Investment Manager, Lancashire County Pension Fund LinkedIn: Investment Property Forum Members