London Local Authorities are paying double the average national rate for fund manager services, according to DETR figures.
Inner London authorities paid £122.87 per scheme member last year while the national average was only £64.52.
London Borough of Camden Pension Fund pensions investment officer Ken Bumpus said: “The reason London figures for fund manager services are higher than the national average is because London authorities have a high rate of specialist mandates.”
Bumpus added: “Specialist services are much more expensive than balanced. Specialist managers charge a one-off fee regardless of the size of funds which are managed. Fees for balanced managers work on a sliding scale – the more funds you have the lower the fees.”
Bumpus said that Camden signed a contract in 1992 with its managers – Philips & Drew and Schroder Investment Management – which has enabled the borough to keep its manager fees down. Bumpus said that the borough paid 0.16% of its total funds to managers last year, and estimated the average in London to be over 0.2%.
In the DETR figures published annually – known as SF3 data – outer London came second highest with £110.09. The metropolitan authorities paid on average £36.50.
By Alistair Graham
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