23 Nov 2015 Collective London pension vehicle receives regulatory approval
Courtesy of London Government Chronicle
The London Collective Investment Vehicle for council pension funds has received authorisation from the Financial Conduct Authority.
The CIV, a platform via which the London boroughs can invest their pension funds collectively to obtain savings on investment manager fees, has been approved as an authorised contractual scheme – a type of tax-transparent asset pool managed on behalf of a group of investors.
London CIV chief executive Hugh Grover said:
“We are now focused on opening our first sub-fund before Christmas, an active global equities fund managed by Allianz GI, and will open a further eight sub-funds by the end of this financial year, giving us around £6bn of assets under management.
Overall the boroughs have some £25bn of assets and throughout next year and beyond we will be opening more sub-funds covering the full spectrum of asset classes in response to the boroughs needs.”
It is anticipated that the CIV will allow boroughs to make savings on the fees paid on their current investments, and allow them to collectively invest in alternative assets such as infrastructure which would be prohibitively expensive for individual funds.
LGPS funds have been tasked with creating six investment pools of around £30bn in order to invest more efficiently. In his speech to the Conservative conference, George Osborne also said the pools should invest in UK infrastructure.