A group of eight local government pension schemes in Wales will launch a search for a third-party firm to provide one or more investment funds for the management of their collective assets.
The eight pension funds, which have a combined £12.8 billion ($16.7 billion) of assets, want the operator to set up an authorized contractual scheme, which is a tax-transparent vehicle, said public tender website Sell2Wales.
A formal search is expected to be launched in October. The notice said administering authorities of the pension funds “are considering the scope and specification of services required.”
In its submission to the government outlining its plans, dated July 15, the Welsh pool said it would appoint a third-party operator in the second half of this year. It intends to design the initial structure of the scheme and its subfunds in cooperation with the chosen firm. Future changes and new subfunds would also be worked on together. The submission document said the selected firm will provide and operate a range of investment vehicles to allow collective investment, be responsible for selecting and contracting with money managers for the management of the underlying assets, and be responsible for related administration. The operator will also be responsible for due diligence.
The eight pension funds are Cardiff and Vale of Glamorgan Pension Fund, Cardiff; City and County of Swansea Pension Fund; Clwyd Pension Fund, Mold; Dyfed Pension Fund, Carmarthenshire; Greater Gwent (Torfaen) Pension Scheme, Pontypool; Gwynedd Pension Fund, Caernarfon; Powys County Council Pension Fund; and Rhondda Cynon Taf Pension Fund, Tonypandy.
The funds have come together as part of U.K. government requirements for the 89 England and Wales local government pension schemes to form asset pools, encouraging economies of scale and cost savings.
Executives could not be reached for comment by press time.
The notice is available on Sell2Wales.