Update on London CIV and Partner Fund investment exposures

Update on London CIV and Partner Fund investment exposures in relation to Israel and the Occupied Palestinian Territories

17 September 2025

As the LGPS enters what is likely to be one of its most important periods, we want to address growing concerns regarding the conflict in Israel and the Occupied Palestinian Territories – especially around calls for divestment that we, both as Pool and Partner Funds, are increasingly being asked to navigate.

The rising death toll in Gaza is a humanitarian tragedy – and it is right that institutions, including pension funds, are being called upon to reflect on investment responsibilities.

As a collective investment pool, exclusively owned by London’s local authorities, London CIV fully recognises that decisions on investments that originate from public finances should be subject to public debate. Scrutiny is essential to ensuring we all get things right. As such, London CIV has a particular duty to support and equip our Partner Funds with mechanisms needed to approach this responsibility with the attention and care it clearly deserves.

However, determining the right way forward, especially concerning such sensitive and complex issues, must be grounded in facts, guided by respect, and underpinned by a clear understanding of investment responsibilities within the LGPS.

Clarifying the facts

Much of the pressure for London CIV to divest is being generated by campaign groups that wrongly claim our Pool has around £7 billion invested in companies alleged to be complicit in conflicts and human rights violations relating to Gaza.

This is incorrect and appears to have arisen from a misunderstanding of data published on the London CIV website last year, following an FOI request. It is important to clarify the following:

• This data actually showed that London CIV’s exposure stood at £713 million, which equated to 4% of the pool’s total assets under management.
• The document also included Partner Fund exposures in their own passive strategies (often described as “deemed pooled”), which totalled £6.5bn. These passive strategies are managed by third-party fund managers, not under London CIV management and entirely outside the pool's control in terms of any investment decisions.
• The data also showed that, of the £713m within London CIV’s own funds, 85% (£608m) was invested in either Alphabet, Meta or Microsoft. This observation is in no way a personal or institutional judgment on these named companies, but rather a view on their size. They are globally dominant tech firms, known for their scale, performance, and ubiquity across investment portfolios.

London CIV recognises the importance of presenting accurate and accessible information, particularly in such a sensitive context. To avoid future misinterpretations, we are committed to improving how we communicate our data going forward.

Our responsibilities

Each Partner Fund runs its LGPS through democratically accountable pension committees, setting strategy and responsible investment (RI) policies that reflect local values and fiduciary duties.

London CIV’s role is to aid in implementing these policies and manage entrusted assets on a day-to-day basis. We provide data on exposures, engage with companies, and design solutions to meet Partner Funds’ diverse needs.

While we appoint experienced underlying fund managers to design and manage our funds, granting them full discretion to make investment decisions within agreed mandates, we set the parameters for those mandates. We work hard to ensure these parameters are developed to reflect our Partner Funds’ RI policies.

Where a change in these policies is communicated to London CIV, we stand ready to support the necessary action our Partner Funds wish to take.

Reaffirming our fiduciary duty

At its core, London CIV exists to help local authorities honour their promise to deliver secure pensions for local government workers and, equally important, to ensure that promise is sustainably upheld so taxpayers are never left to pick up the pieces.

That is our legal and fiduciary duty, and we must focus on that primary purpose while also using our influence to encourage higher standards of conduct in the companies in which we invest.

What’s more, identifying exposure is just the start. The critical question is what to do about it. Where concerns are credible, we believe in engagement: challenging companies to improve policies, strengthen oversight and conduct proper human-rights due diligence.

Simply selling shares does not fix underlying issues; it often just transfers them to investors who may not care. Through our stewardship provider EOS at Federated Hermes, we are already engaging with companies linked to high-risk regions and have seen tangible changes made.

Final thoughts

We respect the strength of feeling on these matters. As several Partner Funds expressed during our recent Annual General Meeting, collective responsibility, transparency, and ongoing dialogue are important as we navigate this challenging and sensitive matter together.

London CIV