Royal County Berkshire Pension Fund, Maidenhead, England, is set to join the asset and liability management pool Local Pensions Partnership, London.
A Berkshire pension fund panel meeting document from Monday said the administering council, Royal Borough of Windsor & Maidenhead, "recognizes the government's requirement for (local government pension scheme) funds to pool their investments and is committed to pursuing a pooling solution that ensures that maximum cost effectiveness for the pension fund. In this respect RBWM exchanged a letter of intent with the Local Pensions Partnership," said the document.
A memorandum of understanding said there is a commitment by both parties to pool most of the pension fund assets from the £2 billion ($2.6 billion) Berkshire Pension Fund with the £12.8 billion of assets already managed by LPP. The partnership will also run Berkshire's pension administration, liability management and employer risk services.
The meeting document said liquid assets will achieve the most instant benefits from pooling; listed equities in developed, emerging and frontier markets represented 34% of the fund's assets as of September 2016.
"RBWM believes that it would be uneconomic to pool existing investments in private funds (private debt, private equity and infrastructure) or real estate funds largely due to the costs of transfer and the inequality created by sharing future returns," added the document.
Also, Berkshire will continue to set its strategic asset allocation, employer contribution rates and other areas of policy.
A news release by LPP said work is now underway in preparing a proposal for approval of assets to be run by LPP effective April 1.
LPP was formed by the £4.6 billion London Pensions Fund Authority and the £6 billion Lancashire County Pension Fund, Preston, England. Pooled assets are managed by its Financial Conduct Authority-authorized subsidiary, Local Pensions Partnership Investments.