London to pool local authority pension funds

The Financial Conduct Authority have approved plans to pool £25 billion of local authority pension funds.

The initiative was set up as a collective investment by London Councils, involving 32 boroughs and the City of London Corporation, to achieve ‘unprecedented’ economies of scale.

The project will be the first of its kind in the UK pension market.

Hugh Grover, chief executive of London collective investment vehicle (CIV), said: “We are now focussed on opening our first sub-fund before Christmas, an active global equities fund managed by AllianzGI, and will open a further eight sub-funds by the end of this financial year, giving us around £6 billion of assets under management.

“Overall the boroughs have some £25bn of assets and throughout next year and beyond we will be opening more sub-funds covering the full spectrum of asset classes in response to the boroughs needs.”

“The creation of London CIV will enable the London authorities to achieve unprecedented economies of scale and enable access to opportunities for investment in alternative asset classes that previously may not have been easily achievable for individual funds.”