The Avon Pension Fund, Bristol, England, should team up with its neighboring local government pension schemes in the South West of England to “actively explore options” for pooling investments, concluded a report by its pension fund committee.
At a meeting Sept. 25, the committee of the £3.8 billion ($5.8 billion) pension fund said it supports in principle the setting up of a South West Collective Investment Vehicle, and authorized its the chief finance officer to “continue work with neighboring funds in the South West to establish proposals” to that end.
The committee meeting report said informal discussions have been held with neighboring councils to consider the possibility of a common investment vehicle or alternative type of pooled assets arrangement. The neighboring pension funds that would be involved are the Cornwall County Council Pension Fund, Truro; Devon County Council Pension Fund, Exeter; Dorset County Council Pension Fund, Dorchester; Gloucestershire County Council Pension Fund, Gloucester; Somerset County Council Pension Fund, Taunton; Wiltshire Pension Fund, Trowbridge; and the Environment Agency Pension Fund, Bristol.
Total assets would amount to about £20 billion, which the report said puts the collaboration “at the bottom end of the government’s expectations, but the intention is that we would be open to other funds joining us.”
The committee said a progress report would be brought to the committee meeting in December.
The committee was discussing the potential for collective investment following announcements by the U.K. government last year that it would look at pooling investments across local government pension schemes, reducing costs. On Monday, Chancellor of the Exchequer George Osborne announced plans by the U.K. government to merge the 89 England and Wales local plans to create six British wealth funds.