London-based £26.5 billion ($35.3 billion) LPPI, one of the smallest Local Government Pension Scheme pools, has emerged as one of the big winners in the UK government’s drive to reduce the number of LGPS pools which collectively manage £392 billion ($522 billion).
Drawing on inspiration from the Canadian model, Chancellor Rachel Reeves has driven policy to reduce the number of pools from eight to six in a bid to boost efficiency and scale, and enable big-ticket investment in the UK economy.
LPPI stands to scoop up an estimated £19 billion ($25 billion) of additional assets from five local authority schemes forced to find a new asset manager after sister pool Brunel Pension Partnership failed to win government approval under Reeves’ ‘Fit for the Future’ criteria.
Leeds-based £65 billion ($86.7 billion) Border to Coast is another winner, with its assets likely to swell to £110 billion ($146 billion) as it welcomes an additional seven partner funds (to make a total of 18) from the other disbanded pool, ACCESS.
Assets under management at LGPS Central, which will also take on assets from ACCESS and Brunel, are forecast to rise to £100 billion ($133 billion).
“Our partnership will be strengthened by the addition of these funds. In coming together, we can use our scale to be more effective, more resilient, and more impactful. Together we will build on our collective strengths and continue to make a difference for the LGPS,” said Rachel Elwell, Border to Coast’s chief executive officer.
cost concerns emerge again
In recently published minutes from its September board meeting, councillors at the £6 billion ($8 billion) Avon Pension Fund moving from Brunel to LPPI, shared their concerns that “there will be material one-off costs incurred in closing down Brunel and moving the fund’s assets into the new joint pool, which should be mitigated over time by lower ongoing costs.”
The minutes also revealed that Avon believed both LGPS Central and LPPI would be “excellent pool partners” and “both pools score very similarly on the majority of criteria”.
Councillors voiced their appreciation for Brunel’s expertise in private markets, climate strategy and responsible investments, and said it was important for all Brunel funds to depart simultaneously, regardless of their pool destination, to share the burden of exiting Brunel in an orderly way in a process that will take 18-24 months.
Separately, the £4 billion ($5.3 billion) Dorset County Pension Fund also stated its reasons for moving to LPPI.
“This is a positive step towards securing the long-term sustainability of the Dorset County Pension Fund. LPPI is a well-established, well-regulated investment pool with a strong track record of performance, advice, responsible investment and collaboration, and we are confident that this new partnership will deliver long-term benefits for our scheme members, their employers and the wider community,” said vice-chair Councillor Andy Todd in a statement.
The £3 billion ($4 billion) Somerset Pension Fund, another of Brunel’s former partners joining LPPI, voiced its disappointment that the government did not believe Brunel could meet its ambitions, and that Brunel funds would have to seek new pools.
“The Pension Fund Committee and officers of the Somerset Fund, and the other nine funds involved, had worked very hard to build Brunel into a successful pool and transition in excess of 95 per cent of our fund’s investments to Brunel. It feels much of this effort has now been wasted and we have to start our pooling journey again,” said pension fund committee chair, councillor Simon Coles.
Governance and legal work to bring the funds into their new pools is set to be completed by 31 March 2026.
In another development, the Wales Pension Partnership Investment Management Company (WPP IM Co) set up to manage the £25 billion ($33 billion) assets of Wales’s eight local government pension schemes representing 412,000 members, has just appointed its first chief executive, Rob Lamb.
Calling WPP a once-in-a-generation opportunity to create a standalone, regulated investment company in Wales that will benefit all stakeholders Lamb said WPP IM Co will invest to “promote economic growth, create jobs, support clean energy, and enhance infrastructure for the benefit of everyone in Wales.”
Writing on LinkedIn, Lamb said the company’s purpose goes beyond protecting pensions.
“We’re building an institution that reflects Welsh ambition, invests responsibly, and creates lasting economic, social, and environmental impact,” he says.
*Chief investment officer of LPPI Richard Tomlinson and chief investment officer of Border to Coast Joe McDonnell will be speaking at the Fiduciary Investors Symposium Oxford between November 4-6, 2025. Register here today.
