Five local authority pension funds are seeking to create an investment project that could deliver returns for scheme members while also helping boost local economic growth.
The initiative, led by a group of Local Government Pension Scheme (LGPS) funds comprising those for Greater Manchester, West Yorkshire, West Midlands, South Yorkshire and Merseyside, has been informed by research published by the Smith Institute last year.
Issued last September, the study 'Local Authority Pension Funds: Investing for Growth' called for reform of how local authority investment funds are managed and the establishment of an independent platform – or ‘clearing house' – to determine the economic, social and environmental merits of local infrastructure opportunities
An advert seeking expressions of interest was published in the Financial Times newspaper today and a website has been created for asset managers interested in scoping the project at www.investing4growth.co.uk
‘A pension fund has an overriding responsibility to make a financial return that will assist it in meeting its pension liabilities without taking unreasonable risks, but it is clear that in meeting these criteria there are investment opportunities that will also deliver an impact on local communities that improves their economic wellbeing, including social and environmental outcomes,' said Cllr Kieran Quinn, chair of the Greater Manchester Pension Fund and leader of Tameside MBC.
‘Funds have taken a number of such investment opportunities and this initiative is not only to establish the depth and breadth of the current market, but to challenge asset managers to bring opportunities forward on sufficient scale to match the investment allocations pension funds are prepared to commit,' Cllr Quinn added.
News of the initiative follows Tuesday's announcement by local government minister Brandon Lewis of a consultation into LGPS arrangements that will include a root and branch review of current investment regulations – which could ultimately allow funds to be aligned to support local growth and infrastructure schemes.
