New research on pooling in major international markets shows that pooling in the UK can drive still more value for the Local Government Pension Scheme (LGPS) in the future. It also confirms that scale benefits in international markets have already been demonstrated as “meaningful” and “realisable”, leading to improved performance after fees, better control over investments, and reduced costs.
The independent research, commissioned by seven UK LGPS pools, covered eleven comparable investors in seven major international markets where the pooling process is at a more mature stage. The research sought to understand the issues and challenges these pools experienced in their evolution. As a result, it enables each individual UK pool – and its partner funds – to use the insights gained to support their own future development.
Speaking on behalf of the commissioning pools, Mike O’Donnell, CEO of LondonCIV said: “Pooling is really delivering in the UK – with the pools up and running and good progress on transitioning the assets. This is therefore an ideal moment to plan for our next phase of development and our continued collective success.”
While recognising there is no ‘best way’ to pool, only different ways, the research nonetheless identified three characteristics of success:
The report also highlighted that the clarity of central government objectives and of the pooling framework can both impact the pace at which pooling delivers value.
Rachel Elwell, CEO of Border to Coast said: “This research gives us powerful insight into how we can deliver even greater value for the LGPS over the long term. More importantly, it gives each pool and their partner funds insight into, and understanding of, how pools have thrived internationally, which will allow them to make the right decisions for their own individual journeys.”
The full report can be found here.
 Access, Brunel, Border to Coast, LGPS Central, LCIV, LPPI and Wales PP
 The research examined firms in several international markets. Individuals from these organisations agreed to interviews based on strict confidentiality, including disclosing the name of the organisation.