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Welsh Public Pensions in Need of Asset Manager

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As the UK continues to pool public pension assets, the eight public pensions in Wales are in need of an external manager for their combined resources. The £13 billion in assets is to be in the care of a third-party as a collective investment vehicle (CIV). One of the councils in the pool, Flintshire County Council, said in the tender notice presented in December “The authority anticipates that ‘additional services’ may include the ability to provide investment vehicles for the sole use of the Welsh pool; securing fee savings; advising on the addition of sub-funds; managing transition activity; manager monitoring, research and selection; enhanced performance, risk reporting; [and facilitating] tax advice related to vehicle selection.”

It is believed that the Local Pensions Partnership (LPP) will be bidding for the contract. Last year, LPP chairman Michael O’Higgins said they were interested in managing other pools. LPP is a partnership between London Pension Fund Authority and Lancashire County Pension Fund. ACCESS, another UK public pension pool, is also rumoured to be in the running. Last year, Wale’s councils picked BlackRock over State Street Global Advisors and Legal & General Investment Management to manage £2.6 billion of passive funds. Pools in other regions are making similar plans. West Midlands Pension Fund has given a proxy-voting mandate to Pensions & Investments Research Consultants Ltd. (PIRC), over its £11.5 billion to be awarded.