LPPI pool projects cost savings of £468m by 2035

LGPS pool says savings have been driven by scale, buying power and performance

Jonathan Stapleton
clock • 1 min read
Chris Rule is chief executive of LPPI and LPP Group
Image:

Chris Rule is chief executive of LPPI and LPP Group

Local Pensions Partnership Investments (LPPI) – the investment arm of the £22.1bn Local Pensions Partnership local government pension scheme pool – has announced it has made £28.2m of cost savings in the year to March 2021.

It said this year's figures bring the total amount it has saved its clients to £74m since the pool was founded in 2016 - putting the organisation on track to deliver savings of £468m by 2035.

LPPI said the money saved has come through the economies of scale that LPPI's pooling model has created - including allowing access to more cost-effective assets in private markets and increasing buying power to negotiate fund manager discounts.

It also said that internal management was also key to its performance - with LPPI currently managing over half of its global equities fund in-house and investing directly in infrastructure through its own infrastructure fund and via GLIL Infrastructure - as was its investment performance, which has outperformed its long-term benchmark.

LPPI said it is planning to "incrementally grow" its in-house investment team going forward.

To date, LPPI has launched eight investment funds covering asset classes including equities, fixed income and infrastructure - with 100% of assets from client funds transitioned, and managed largely via these vehicles.

LPPI and LPP Group chief executive Chris Rule said: "The value of pooling stretches far beyond cost reductions, but these figures are strong evidence for the success of pooling, and its long-term future as a vehicle for paying public sector pensions.

"A key part of our model is internally managing the assets and offering a tailored range of investment options to support strategic asset allocation as we help clients manage their liabilities, which stretch out into the very long term."

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