Tuesday 13 April 2021

Wales Pension Partnership (WPP) launches decarbonisation initiative

The Wales Pension Partnership (‘WPP’), the pooling entity for the eight Welsh LGPS Funds, has implemented a new decarbonisation initiative across the £2.5bn of its global equity assets managed by Russell Investments.

This will see the WPP’s global equity mandate achieve a targeted reduction in both its carbon footprint and fossil fuel reserves exposure by 25% relative to its benchmark (the MSCI All Country World Index). The portfolio will also exclude companies that rely on coal to generate revenues.

The WPP is utilising Russell Investments’ Enhanced Portfolio Implementation (EPI) infrastructure to achieve its decarbonisation targets.

EPI leverages a centralised trading and portfolio management process with Russell Investments responsible for executing the investment strategies of the WPP’s underlying fund managers. With this framework, the WPP is able to benefit from greater control and customisation around decarbonisation and other ESG-related objectives. EPI also seeks to deliver trade efficiencies through sizeable reductions in trading activity.

The decarbonisation initiative represents a positive step towards the WPP’s climate related and wider ESG goals.

Commenting on the launch of the new decarbonisation initiative, Cllr Glyn Caron, chair of the Joint Governance Committee at the Wales Pension Partnership, says:

“Climate change not only poses significant challenges for society; it also represents a financial risk for our Constituent Authorities and scheme members. By reducing the carbon exposure within our active equity assets, in partnership with Russell Investments, we are seeking to address these challenges. We see this as a positive first step in meeting our long-term sustainability goals.”

Jim Leggate, Managing Director, UK Institutional & Middle East at Russell Investment, also comments:

“Issues around climate change and the transition to a low carbon economy are increasingly critical issues that institutional asset owners are seeking to address. We are pleased to support the WPP in their carbon reduction objective as part of a wider framework designed to reflect the evolving needs of their members. Through our Enhanced Portfolio Implementation framework, we are well positioned to deliver a holistic, efficient and low-cost customised solution that evolves with the combined long-term sustainability goals of the WPP’s Constituent Authorities.”

Eamonn Gough, Senior Relationship Manager at Link Fund Solutions, adds:

“As an engaged asset owner, the WPP understands the crucial importance of supporting the transition to a low carbon economy.  The enhanced implementation framework being utilised has the advantage of keeping the existing underlying managers and the broad operating structure whilst enabling the WPP to achieve aggregate portfolio decarbonisation.”

 

ENDS

 

For more information:

WalesPensionPartnership@carmarthenshire.gov.uk

 

Notes to Editors:

* List of Constituent Authorities

  • Cardiff & Vale of Glamorgan Pension Fund
  • Clwyd Pension Fund
  • Dyfed Pension Fund
  • Torfaen Pension Fund
  • Gwynedd Pension Fund
  • Powys Pension Fund
  • Rhondda Cynon Taf Pension Fund
  • City and County of Swansea Pension Fund

 

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provides the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

 

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Tuesday 08 December 2020

WPP wins the Innovation Award at LAPF Investments Awards 2020

We are delighted to have won the Innovation Award at LAPF Investments Awards 2020.

Like other pools, we adopted a multi-manager approach to fund construction, to deliver the strongest possible risk-adjusted returns while achieving significant savings. However, this award recognises we made a significant step in innovation, adopting an “Enhanced Portfolio Implementation” (EPI) framework within our equity funds.

Managed by Russell Investments (within our ACS fund structure hosted by Link Fund Solutions), EPI brings the implementation of multiple equity manager portfolios into one holistic portfolio. Whilst new to LGPS, this leverages proven technology and has two significant benefits for our host authorities:

  1. Meaningful cost savings over and above the manager fee savings already achieved;
  2. Improved Governance from an ESG perspective: we have taken steps to lower our carbon exposure by an additional ~25% without impacting manager alpha. This is hugely powerful in supporting our administering authorities’ work towards their decarbonisation goals.

Not only has this been powerful for our members, but we believe this step also demonstrates that LGPS pooling can go beyond manager fee negotiations, accessing a second tier of cost saving and improved governance.

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Tuesday 27 October 2020

Wales Pension Partnership (WPP) launches fixed income platform

The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh LGPS funds, has launched a series of fixed income funds on its existing ACS platform to provide a choice of sub-funds to implement their fixed income investments based on their strategic asset allocations. All eight constituent authorities* will be investing in at least one of these sub funds.

The new pooled investments will be comprised of five sub-funds focused on global credit, global government bonds, absolute return bonds, multi-asset credit and UK credit. Apart from UK credit, the other four sub-funds will be managed by Russell Investments and utilise a range of generalist and specialist fixed income managers to deliver enhanced risk-adjusted returns.

Link Fund Solutions, which was appointed by the WPP as its FCA authorised Operator in 2018, is responsible for creating and operating the new fixed income platform structure.


The single-manager UK credit strategy will launch with £550 million while the four sub-funds managed by Russell Investments range in size between £430 million and £780 million.

Commenting on the launch of the new fixed income platform, Cllr Glyn Caron, Chair of the Joint Governance Committee, says:

“As investment markets become more complex, we recognise that more sophisticated investment solutions are needed to meet the long-term objectives of our eight Constituent Authorities*. Working with Russell Investments and Link Fund Solutions, we believe these funds will provide us with the ability to optimise our exposure to fixed income markets while delivering on our objectives to improve diversification and reduce our costs”.

 

Jim Leggate, Managing Director, UK Institutional & Middle East at Russell Investment, also comments:

“We are very pleased to expand our relationship with the Wales Pension Partnership following our original appointment in 2018 as the investment management solutions provider. With this launch, we are now responsible for managing £5.2 billion of WPP’s assets across equities and fixed income. The progress we have all made to date is a testament to the great collaboration of many individuals across all eight constituent authorities*, including officers, members and their advisers.”

 

Eamonn Gough, Senior Relationship Manager at Link Fund Solutions, adds:

WPP understands the need to employ a sophisticated investment solution to meet its investment objectives in what is a challenging market environment. We believe this platform meets these requirements and allows WPP to access the expertise of some of the world’s leading fixed income managers.”

ENDS

 

For more information:

WalesPensionPartnership@carmarthenshire.gov.uk

 

Notes to Editors:

* List of Constituent Authorities

  • Cardiff & Vale of Glamorgan Pension Fund
  • Clwyd Pension Fund
  • Dyfed Pension Fund
  • Torfaen Pension Fund
  • Gwynedd Pension Fund
  • Powys Pension Fund
  • Rhondda Cynon Taf Pension Fund
  • City and County of Swansea Pension Fund

 

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provides the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

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Friday 05 June 2020

The Wales Pension Partnership’s first annual update

The Wales Pension Partnership (‘WPP’) Is pleased to present its first annual update. The progress made over the past twelve months reflects the ability of the eight Welsh Constituent Authorities to work together to deliver their shared set of objectives. Some significant milestones have been achieved during the year and it is extremely pleasing to see that these milestones have been extended across a variety of fields, including, Investments, Governance, Communications and Training. The annual update can be found under the Publications section, please click here.

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Wednesday 08 April 2020

Wales Pension Partnership appoints Hymans Robertson as its Oversight Advisor

We are delighted to let you know that the Wales Pension Partnership (‘WPP’) has formally appointed Hymans Robertson LLP to act as WPP’s Oversight Advisor. Hymans Robertson’s role spans oversight and advice on governance arrangements, operator services, strategic investment aspects and project management support. 

Following an in depth procurement exercise WPP appointed Hymans Robertson on the 1 January 2020, the contact is for 3 years with the potential for a 2-year extension. WPP were impressed by Hymans Robertson’s track record of providing LGPS focused investment strategy advise as well as their knowledge and experience of the ACS Operator market, they were also able to evidence their strength in investment governance services and project management.

The WPP is excited about the next phase of its journey which will see it focus on delivering the benefits of pooling to its key stakeholders, this appointment reflects WPP’s confidence in Hymans Robertson’s ability to support WPP in the next phase of this journey.

Please stay tuned to the website for the soon to be released WPP Business Plan, which outlines the exciting and ambitious work that the WPP will carry out over the next three years. The Business Plan has been formulated with assistance from Hymans Robertson and represents the united priorities and objectives of Wales’ eight Constituent Authorities.

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Wednesday 08 April 2020

Wales Pension Partnership appoints Robeco UK as its Voting and Engagement provider.

The Wales Pension Partnership (‘WPP’) is pleased to announce the appointment of Robeco UK, a branch of Robeco Institutional Asset Management B.V (‘Robeco’) as the WPP’s Voting and Engagement provider. Robeco were appointed following the completion of a comprehensive procurement exercise. Robeco’s contract will commence on 1 April 2020 and will run for an initial period of 3 years with the potential for a 2-year extension.

Robeco will assist the WPP in formulating and maintaining a Voting Policy and Engagement Principles that are in keeping with the Welsh Constituent Authorities’ membership of the Local Authority Pension Fund Forum (‘LAPFF’)

Robeco will be tasked with helping WPP formulate its Voting Policy, this work will be carried out in collaboration with the eight Welsh Constituent Authorities over the course of the next six months. Following this, Robeco will take responsibility for implementing the Voting Policy across WPP’s £5bn active equity portfolio and reporting to WPP and the underlying Funds.

Additionally, Robeco will assist the WPP in framing its Engagement Principles and will undertake engagement activity on behalf of the WPP in accordance with the agreed principles. As part of its remit Robeco, will embrace WPP’s track record of collaborating with likeminded partners, policy makers and regulators to ensure that WPP achieves the most effective engagement outcomes.  Robeco will also provide reporting and training on the WPP’s engagement activities at both a Pool and Constituent Authority level.

WPP will publish its Voting Policy and Engagement Principles on this website once they have been finalised.

The WPP believes that Responsible Investment alongside consideration and evidential management of Environmental, Social and Governance issues should result in better outcomes for WPP’s stakeholders. The appointment of Robeco evidences the WPP’s continued delivery of the commitments made in its Responsible Investment Policy and its vow to exercise its voting rights in line with the interest of its stakeholders and engaging with investee companies to enhance the long-term value of the Constituent Authorities’ investments within WPP.

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Monday 25 November 2019

Wales Pension Partnership announces RI policy

The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh LGPS Funds, has announced a new Responsible Investment (RI) policy, highlighting its commitment to responsible investment and desire to be a leader in this area.

The new overarching policy was developed collaboratively by the WPP and its eight Constituent Authorities* and will be adopted by them all. At the same time, it will allow individual Constituent Authorities to maintain and develop their own RI policies.

Commenting on the development of the new RI policy, Chris Moore, Director of Corporate Services from the WPP Host Authority, says: “Responsible investment policies are vitally important not only to the administration of our funds but to the future of Wales. We recognised how crucial it was for the WPP to establish its own responsible investment policy and aimed to ensure that all stakeholders of the WPP were represented in the policy’s development. Building support and gaining consensus among the Constituent Authorities was imperative. We needed to be sure that the policy was representative of the broad range of investment beliefs within the Pool. We are thrilled to have agreement on a policy that can now be implemented on behalf of the underlying Constituent Authorities. We are all highly committed to seeing this new ambitious RI Policy succeed.”

In its new RI policy, the WPP has agreed to prioritise a number of actions over the next 12 months, including developing a specific climate risk policy and engaging with its investment managers to develop an appropriate set of RI monitoring metrics.

The full RI policy can be found on the Wales Pension Partnership website.

 

* List of Constituent Authorities

  • Cardiff & Vale of Glamorgan Pension Fund
  • Clwyd Pension Fund
  • Dyfed Pension Fund
  • Torfaen Pension Fund
  • Gwynedd Pension Fund
  • Powys Pension Fund
  • Rhondda Cynon Taf Pension Fund
  • City and County of Swansea Pension Fund

 

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provide the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

Read More
Wednesday 10 January 2018

The Wales Pension Partnership is the first LGPS investment pool to appoint a pool operator

The Wales Pension Partnership (WPP) today announces the appointment of Link Fund Solutions Ltd (Link) to establish and run a collective investment vehicle for the sole use of the Local Government Pension Scheme (LGPS) funds in Wales.

The appointment of Link as the FCA authorised operator follows a rigorous procurement process run by the WPP and its advisors, Hymans Robertson and Burges Salmon. This will enable the pooling of circa £15bn of assets across a range of asset classes. The passive mandates of all 8 LGPS funds in Wales are already jointly invested, delivering estimated fee savings of over £2m per annum on assets in excess of £3bn. The appointment of Link represents another key milestone in the pooling process, working towards the Westminster Government’s April 2018 target date.

Link will establish and run an Authorised Contractual Scheme (a tax efficient UK collective investment vehicle) on behalf of the WPP. The ACS will have sub-funds in a range of asset classes that will meet the needs of the investing authorities, enabling them to execute their differing asset allocation strategies. With the support of Russell Investments, and in consultation with the eight individual local authority funds, Link will begin the process of appointing a number of investment manager firms, while the LGPS funds will retain full control over strategic asset allocation decisions. By using fewer investment manager firms with larger mandates, it is expected that the pool will deliver fee savings, one of the primary aims of Government policy.

The WPP’s Joint Governance Committee was established earlier in 2017 and is responsible for oversight of the pool’s operator, Link, and the services it delivers to the LGPS funds in Wales.

Councillor Stephen Churchman, Chairman of the Joint Governance Committee: “After a rigorous selection process, we are delighted to announce the appointment of Link as the operator company for the LGPS investment pool for Wales. The LGPS administering authorities in Wales have a long and successful history of collaboration. We are on track to have the pool operational in early 2018 delivering further investment manager fee savings that will benefit all of the LGPS funds in Wales.”

Carmarthenshire County Council acts as Host Authority, liaising day to day with the operator, Link, on behalf of all of the LGPS funds in Wales.

Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP):

“The appointment of Link is a significant milestone in the establishment of a £15bn investment pool for the LGPS funds in Wales. We look forward to working with Link to deliver the benefits of investment pooling for the LGPS in Wales.”

The Wales Pension Partnership (WPP) comprises of the following LGPS funds: Cardiff and Vale of Glamorgan, City and County of Swansea, Clwyd, Dyfed, Greater Gwent (Torfaen), Gwynedd, Powys and Rhondda Cynon Taf.

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