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.
In recent years some of the biggest Local Government Pension Schemes, including Greater Manchester and Strathclyde, have acted to increase their investment in local infrastructure and housing.
