New Global Sustainable Equities Active Fund Launched by LGPS Central

Publication date: 04/05/2022 13:04:30

 LGPS Central have announced the successful launch of its £1 billion Global Sustainable Equities Active Fund with four local authority Partners investing at launch.

The fund consists of three themed sub-funds covering broad, thematic and targeted funds that will be managed by Mirova, Liontrust and Baillie Gifford respectively. Managers were selected on their merit and their alignment to fund themes. Scoring was based on an extensive range of metrics and qualitive information stretching across sustainable investing, financial performance, operational management and firm culture. The fund will be benchmarked against the FTSE All World Index.

Initial investors from launch are Cheshire, Nottinghamshire, Shropshire and Worcestershire Pension Funds.

LGPS Central Chief Investment Officer, Gordon Ross, said ‘This asset class was highlighted as a priority for Partner Funds following respective reviews of their investment strategies. The team here at LGPS Central then worked in collaboration with our Partner Funds to determine the mandates that formed the basis of the Fund, aiming to reflect the varying risk and return targets required’. He added, ‘We are continuing to develop our product offering to provide suitable choice to our valued Partner Funds. In the spirit of Pooling our aim is to offer high performing, cost effective investment vehicles in line with their varying strategies and this fund launch represents a very positive addition to our offer’.

The aim of the fund is to bring together a suitable mix of diverse managers to invest in only the most sustainable businesses, with the expectation that it will deliver suitable return over the longer term as the world transitions to a lower carbon economy.

Quotes from fund managers:

Mirova – Jens Peers, CEO & CIO, Mirova US

‘In an ongoing effort to encourage greater investor engagement with strategies focused on sustainability, we are delighted to partner with LGPS Central. At Mirova we are well aware that investors are aligning their beliefs with their investment outcomes, increasingly allocating capital to sustainable investment solutions.  We look forward to working with LGPS Central to deliver Mirova’s innovative investment capabilities and proven track record built over the last decade, to their Partner Funds and transitioning to a more sustainable global economy’.

 Liontrust – Peter Michaelis, Head of Sustainable Investment, Liontrust Asset Management

‘Liontrust is excited to be managing the long-term savings for the Partner Funds of LGPS Central through our 21-year-old Sustainable Future investment process. It is vital that underlying members not only have the financial wealth but also a healthy world and society in which to enjoy their retirement. Our investment process seeks to help to achieve this by investing in companies that contribute to creating a cleaner, safer, and healthier world and generate attractive returns for investors through identifying the key structural growth trends that will shape the sustainable economy of the future. We are delighted that LGPS Central has given us the opportunity to provide its Partner Funds with access to this process at a time when there is growing demand for sustainable investment as an increasing number of people want their investments to make positive contributions to society, the environment, and the economy.’

Baillie Gifford – Chris Murphy, Helen Roxburgh

Baillie Gifford is delighted that our Positive Change Strategy is available to the Partner Funds of LGPS Central. We look forward to helping deliver attractive long-term returns and positive change by contributing towards a more sustainable and inclusive world.

Shropshire Pension Fund - Cllr Thomas Biggins, Chairman of the Shropshire Pensions Committee

‘The Shropshire County Pension Fund has done a significant amount of work over the last 18 months on climate change and this investment continues to show our commitment to reduce carbon emissions within our equity portfolios.  We are therefore delighted to commit £120m to the new LGPS Central Global Sustainable Equity fund.

The investment will enable the Shropshire County Pension Fund to continue with our commitment to transition to net zero carbon emissions across all of our investment portfolio. It is also another strong commitment to accelerate our plans to decarbonise our equity portfolios, while at the same time protecting financial returns. We know that climate change is an issue of increasing importance for our members and this new investment is yet another demonstration of our commitment to tackling the issue, in order to protect our investment portfolio from climate change risk’.