London Councils hired Northern Trust as the asset services provider for a collective investment fund for 33 local authority pension funds in London, said Hugh Grover, director of fair funding, procurement and performance at the organization, which represents the authorities.
The common investment vehicle is designed to provide the 33 local government pension funds in London with a platform through which they can invest collaboratively. These pension funds have more than £24 billion ($36 billion) in assets.
Northern Trust will provide global custody, fund administration and depository services for the common investment fund. It is set up as a tax-transparent pooled fund, known as an authorized contractual scheme.
“We have now finished the procurement of the asset servicer and the contract is being awarded to Northern Trust,” Mr. Grover said in a telephone interview. “For us, this is now finally having in place one of the, if not the, key partners in the whole structure.”
The hire followed a competitive bid process, which started in July.
The next step, Mr. Grover said, is to finalize the operating model for the fund operator. London Councils set up a limited liability partnership company to run it, “and we are finalizing how that will be structured from an operating point of view. Then we will take that to the (Financial Conduct Authority, the U.K. financial regulator), probably in a couple of months’ time, and start going through the authorization process. Then we will structure the fund,” Mr. Grover said.