London Pensions Fund Authority chairman Edmund Truell has confirmed the capital's public sector schemes will be consolidated into a single fund which will invest heavily in local infrastructure.
In an interview with the Financial Times, he said pooling the schemes into a single fund would cut costs, particularly investment management charges and administration fees.
It will bring together the assets of 32 boroughs, the LPFA, and Transport for London in a £40bn fund. Truell did not give a timescale for the merger, saying this would depend on the individual funds.
Consolidation has been mooted for some time, and Truell backed the objective last year, saying it would enable the fund to invest in long-term infrastructure and housing assets (PP Online, 18 December 2012).
Truell also said the organisation's investment strategy would change, as the LPFA reduced its holding of gilts which he believes no longer match pension scheme liabilities.
"I have told the LPFA you have to sell gilts or you will be bankrupt," he said. "If we free up this capital we can allocate a significant sum to housing and infrastructure in London."
He said the fund would invest in long-term rent and shared ownership housing in partnership with construction companies, housing associations and the Greater London Authority.
The government will set up an infrastructure bank to support investment and to co-invest alongside investors including pension funds.
The Retail Prices Index (RPI) will be reformed and aligned with the housing cost-based version of the Consumer Prices Index, known as CPIH, by 2030, the Treasury has confirmed.
Estatee agent denies a shareholder’s absence from voting is an issue, finds Minerva Analytics.
In this live blog, Professional Pensions' sister title Investment Week collates all the breaking market news, analysis and opinion on equity, bond and currency movements as well as the impact of trade wars, tightening monetary policy and the Brexit negotiations....
Attractive valuations and prospects for economic recovery support small-caps