The Local Pensions Partnership (LPP) has set up a private equity structure, bringing together the investments of the London Pensions Fund Authority and Lancashire County Pension Fund.
The launch comes as the pool has been in operation for a year after receiving regulatory authorisation last April.
The structure pools together the two stakeholder funds' total £1.8bn private equity assets under the management of LPP Investments (LPPI), a fully-owned subsidiary of LPP, and is expected to lead to cost savings and investment benefits.
The FCA-authorised investment manager can also be appointed directly by other funds to manage private equity investments.
The strategy seeks to achieve long-term investment returns by investing in companies at various stages of the growth cycle such as buyout, growth capital, special situations, and distressed.
It follows on from the LPP's launch of its £5bn global equity fund last November, which has generated cost savings of more than £7.5m per annum for LPFA and Lancashire.
LPP chief executive Susan Martin said: "Over the next few months we will continue to launch more funds and structures with infrastructure, total return, fixed income and credit in the pipeline.
"As a not-for-profit pension services organisation, LPP is implementing an effective investment management structure that helps to deliver cost savings and investment benefits to our clients, their employers and scheme members."
The pooling process across the Local Government Pension Scheme (LGPS) is well under way with the remaining six pools due to be operational by April 2018. The next stage is making sure all the required components are in place to make applications to the Financial Conduct Authority (FCA), which are expected to be sent by this Autumn.
The LPP and the London Collective Investment Vehicle are already operational with FCA authorisation, having been agreed prior to the government's intention to pool the investments of the 89 LGPS funds.
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