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

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."

More on Investment

The panellists were (left to right); Andrew Brown, Columbia Threadneedle Investments; James Double, Vidett; Sonia Kataora, Barnett Waddingham; Paul Tremelling, Visa; Jonathan Stapleton, Professional Pensions; Michael Jones, Eversheds Sutherland; Kieron Snow, Phoenix Corporate Investment Services

The changing world of DC investment

The key investment trends in DC and the evolution of pre-retirement default strategies

Professional Pensions
clock 25 September 2023 • 28 min read
Partner Insight: Unlock the potential of investing in Sustainable Natural Capital

Partner Insight: Unlock the potential of investing in Sustainable Natural Capital

Natural capital is an emerging investment class that can provide opportunities to combine financial returns with direct real world impact, helping solve some of the major issues the world faces today.

Van Lanschot Kempen Investment Management
clock 25 September 2023 • 3 min read
Industry responds to scaling back on net zero

Industry responds to scaling back on net zero

IGG and Aon say pension schemes should not be deterred from their commitments

Jasmine Urquhart
clock 22 September 2023 • 2 min read