LGPS 201: Wins and warnings from the shake-up
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The dust from the 2025 consolidation in the LGPS sector is yet to settle. As of mid-October, all ‘orphaned’ schemes have chosen new pooling partners. mallowstreet’s insights team has been busy building a dashboard for LGPS data, but it has felt like shooting at a moving target. So what has actually changed, and what wildcards come next?
Border to Coast wins the size race (for now)
We were going to use our new LGPS data dashboard to show how LGPS assets will be reallocated once all ‘orphaned’ pools chose their partners, but Pensions Expert and pensionsperformance.com beat us to it – and did it better with a video. Here is where the race finished:
Here is how pooling partners changed in 2025:
We hoped to simulate new asset allocations using our dashboard, but data inconsistencies got in the way. Given that both the ACCESS pool and Brunel Pension Partnership (Brunel PP) investments were managed externally in third-party funds, it remains to be seen how the assets will be reallocated and whether any of the existing mandates of the ‘orphaned’ funds will be reorganised so they can transfer in-specie to the new pools.
Not all pools were created equal
When putting together the LGPS data dashboard, we learned an awful lot about these schemes. For example, all but the Northern LGPS pool have established authorised contractual schemes (ACS) for the sub-funds they make available to the participating schemes. The ACCESS pool, Brunel and Wales Pension Partnerships (Wales PP) all use third-party ACS operators. All three of them invest via external asset managers.
In contrast, Border to Coast Pension Partnership are operators of their ACSs, and all the investments are managed in-house. London CIV is the operator and manager of all ACSs available to their participating schemes, but they may be invested in one or multiple third-party asset managers. LGPS Central mix investments in trusts, funds and individual securities in their sub-funds and act as the in-house operator for all ACSs.
Did the best really come out on top?
The government’s Fit for the Future consultation was clear “that pools with outsourced models, or pooling of some private markets assets only, have delivered significant savings and diversification to date but are not well placed to deliver for the future while retaining their current model. They lack the substantial in-house expertise” of their peers.
Many of the ‘winning’ pools, including Border to Coast, LGPS Central, London CIV and the Local Pensions Partnership (Local PP or LPPI), had more in-house capabilities than ACCESS and Brunel. Additionally, we found that Border to Coast, LGPS Central and LPPI provide the best level of investment reporting look-through.
Some also made important hires this year:
- LGPS Central hired Nigel Peaple from the PLSA as its first director of policy, as well as Rajeev Mehta as programme director to implement changes at the pool and benefit from his extensive transformation experience in the asset management industry.
- LPPI strengthened its investment team with Dev Jadeja joining as deputy CIO and a raft of internal promotions to reorganise its illiquid portfolio management team.
- Wales PP appointed Rob Lamb from Invenian to lead the pool into becoming an FCA-authorised investment company.
Were Brunel and ACCESS truly ‘laggards’?
While it may be true that both of these pools used a third‑party ACS and most of their investments were externally contracted, through our LGPS data dashboard we found that Brunel possibly had the highest and most diverse allocation to the UK (37% of all assets, including investments in various private markets). At an estimated 18%, ACCESS also invested quite a lot in the UK, albeit mainly via listed equities and fixed income.
Frustratingly, Brunel also had possibly the second most sophisticated approach to sustainability (after London CIV with its 2040 goal and ambitious interim 2025 and 2030 targets and nature fund). Brunel PP had a net zero 2050 goal and intended to cut emissions by 50% by 2030. It also had an equality, diversity and inclusion (EDI) and community focus, and treated biodiversity as a priority.
Although ACCESS proposed to build its own FCA‑regulated investment company, ministers concluded its plan did not meet the vision. Brunel also received a letter from the Ministry of Housing Communities and Local Government (MHCLG) saying its proposals failed to meet the government’s vision. Both pools argued that the criteria used were unclear – and it is hard to disagree because the government allowed Wales PP and Northern LGPS to continue.
What set Wales PP and the Northern LGPS apart?
ACCESS managed over £50bn and Brunel over £30bn. While sizable, this left them short of the £60bn+ size that pools like Border to Coast and LGPS Central achieved post‑consolidation.
Pensions Minister Torsten Bell has said there are ‘no plans’ for further government-driven consolidation in the LGPS. Despite this, we are left wondering whether Wales PP and the Northern LGPS might be left vulnerable and what steps they will take to future proof themselves.
Northern LGPS does have its £60bn size to its advantage as well as a net zero 2050 commitment. The pool also said earlier this year it was developing its interim decarbonisation objectives and targets. However, it lacks an ACS and only pools private market investments, which raises doubts over its claims of 95% pooling progress. It has said that cost efficiencies from pooling three massive participating schemes are limited, so it is one of two remaining pools managed by joint committee.
Wales PP is acting already, creating an FCA‑authorised investment company pooling £25bn and investing directly in local infrastructure. A government press release praised WPP for launching a new company that will deliver growth and jobs, citing a small investment in a battery‑storage project that supports Welsh communities. What remains a concern is that Wales PP has not yet set any net zero or climate transition goals, and only undertakes engagement across ESG and nature issues. Its 2024 business plan signals that the net zero journey planning is yet to begin.
What would you like to know?
We built the LGPS Data Dashboard to bring transparency to an evolving system. We know there is more to uncover, in order to make it truly useful.
What should we do next? Go over UK allocations and increase data coverage? Add sector breakdowns? Estimate foreign currency exposure or sustainability scores? We welcome feedback on what data, tools or visualisations would make the dashboard more useful to your organisation, your fund, or your members – please email insights@mallowstreet.com with your ideas.
Special thanks to our summer intern Olusegun Owoeye whose work made this data consolidation possible.
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