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Local Government Pension Scheme changes

The 88 Local Government Pension Schemes (LGPS) in England and Wales are merging their investment activities. This was first heralded in a consultation in May 2014 (see our coverage from the time here).  Eight pools submitted pooling proposals in July 2016 (details in the table below). The proposals are important for real estate as an asset class as the various LGPS are major investors. However pooling real estate is a complex and potentially costly process which may well erode the potential cost savings that might come with scale. Larger pools may also be able to make allocations to riskier assets and to overseas assets. Although the returns might be higher these strategies too are likely to be more costly in absolute fee terms. The process of implementing pooling for real estate is likely to be significantly more complex than for some other asset classes.

 

Merger of the Scottish LGPS pools is now also under discussion

Seminars

 

John chaired the thre AREF / IPF seminars on LGPS pooling in November 2016, March 2017 and May 2018.

 

You can download the slides from seminar 1 here and from seminar 2 here.

 

You can read a summary of the second seminar in IPE Real Estate here.

 

You can read a summary of the third seminar from AREF here.

 

Practical experience

 

John is advising one of the pools on its real estate pooling vehicle.

 

For updates

 

We will be issuing regular updates on this topic. Sign up to our mailing list here.

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