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.”
For more information:
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
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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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:
- Meaningful cost savings over and above the manager fee savings already achieved;
- 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.
The Wales Pension Partnership’s first annual update
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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.