The London Pensions Fund Authority has deposited the lion's share of its cash portfolio within the Greater London Authority, as part of the Mayor of London's shared service agenda.

The cash will be managed alongside the £2bn GLA Group Investment Syndicate (GIS) under an interim arrangement, while the LPFA concludes its formal admission to the framework.

As a result, the LPFA is expected to significantly increase its cash returns and benefit from enhanced liquidity from the larger scale of transactions and gain from the strength of the GLA's existing money market relationships.

In exchange, the LPFA's investment committee, which includes Local Government Association chairman, Sir Merrick Cockell, Dermot ‘Skip' McMullanas and Kerry Adby, will help review the GIS investment strategy, assisting with the management of the group treasury, providing best practice in judging risk and return.

LPFA director of finance, Luke Webster, who will lead the combined treasury team in partnership with the GLA, will be responsible for establishing a centre of excellence for public sector pensions.

‘This commitment underlines our philosophy of collaboration, promoting knowledge-sharing, delivering economies of scale and helping to create centres of excellence within the public pensions sector,' said Mr Webster.

He added the collaboration would reduce overall administration, cost and transaction risk and end duplication of cusotdy and execution facilities.

‘This move is in line with the Mayor of London's shared service agenda, delivering efficiency, increasing service resilience, providing scope for team development and achieving sufficient economy of scale to justify collective investment in improved systems and processes,' he said.