LGPS Central launches multi-asset credit fund

James Phillips
clock • 1 min read
Ross: This fund means fewer managers, lower costs and a reduced governance burden
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Ross: This fund means fewer managers, lower costs and a reduced governance burden

LGPS Central has launched its £680m multi-asset credit (MAC) fund with initial buy-in from four local authority partner funds.

The Local Government Pension Scheme (LGPS) pool has secured support from the Cheshire, Leicestershire, Nottinghamshire, and West Midlands funds.

After a tender process involving more than 80 fund managers, BMO Global Asset Management (GAM) and Western Asset Management Company have been appointed to run the mandate, each receiving half.

LGPS Central chief investment officer and investment director for fixed income Gordon Ross commented: "Pursuing a MAC strategy will give partner funds exposure to multiple fixed income assets/classes through a single fund, thereby resulting in fewer managers, lower costs and a reduced governance burden.  

"It will provide allocation to a broad breadth of strategies, that would not be investable as a standalone asset class, and our fund managers will have the flexibility to move opportunistically between those asset sectors quickly and efficiently."

He said such strategies can also provide "yield enhancement" compared to traditional fixed income strategies, helping schemes particularly when in low-rate environments.

BMO GAM head of UK institutional and managing director Greg Skinner added: "Our long-term investment philosophy, competitive performance over multiple cycles and commitment to responsible investment through active engagement fully aligns with the needs of LGPS Central, the partner funds, and ultimately the members."

Western Asset Management head of UK institutional Daniel Blass said: "We look forward to successfully applying our fundamental value approach and robust integration of ESG factors in the management of the MAC fund."

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