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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The appointments follow a rigorous procurement process run by the WPP with investment consultancy firm bfinance. The development will enable efficient and effective access to illiquid asset classes that are fast becoming significant holdings for LGPS funds.

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“Alternative asset classes have historically been challenging to access in a cost-effective manner. Pooling offers the opportunity to address this challenge. The WPP’s constituent funds have increasing strategic demand for these investments, and we look forward to working with our newly appointed partners to meet this demand.”

 

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