News

Wales Pension Partnership recognised for ESG Innovation

The Wales Pension Partnership (WPP) is delighted to have been recognised for ESG Innovation, winning this category at the LGC Investment Awards ceremony which was held on 29^th November 2024.

The award reflects the critical importance that the WPP and its constituent authorities continues to place on sustainability issues. It recognises the success of the Sustainable Active Equity Fund, developed and managed in partnership with Waystone Management UK Ltd and Russell Investments, which has grown to become one of the largest sustainable investment funds of its type in the UK.

Launched in July 2023, the fund brings together all eight underlying Authorities within the WPP to invest together sustainably for the first time. Utilising a rigorous research framework and flexible approach to adapt to evolving sustainability themes, the fund offers a solution that aligns with Net Zero climate change goals whilst complementing the existing global equities allocations.

As our implementation partner, Russell Investments brings more than 50 years’ experience of researching and evaluating external managers, utilising both qualitative and quantitative inputs to allow to collaboratively deliver a multi-manager portfolio that both meets today’s needs whilst also being able to meet the sustainable investment requirements of the future.

Commenting, Cllr Elwyn Williams, Chair of WPP’s Joint Governance Committee, said:

“Innovation and collaboration is critical to meet the vital ESG challenges the world faces today. We remain wholly committed to delivering best-in-class investment solutions for the benefit of our members and look forward to working with our partners to further address critical sustainability issues.”

The Wales Pension Partnership responded to the Pensions Investment Review: Call for Evidence on Wednesday 25 September 2024

Full response can be found here 

The Wales Pension Partnership responded to the Pensions Investment Review: Call for Evidence on Wednesday 25 September 2024

Full response can be found here 

The Wales Pension Partnership (WPP) announces the latest in its series of appointments to facilitate implementation of its Private Markets investment solutions.

The WPP will establish a WPP Real Estate investment proposition built around three pillars

• UK Core Real Estate, to take existing pooled fund investments and transition them over time to an open-ended direct property investment portfolio.
• International Real Estate, to establish an open-ended investment vehicle investing in funds and direct assets on a global basis.
•  Local / Impact Real Estate, to develop an investment programme utilising fund investments and direct asset investments in UK Impact strategies, with at least 50% of assets located in Wales.

Following the completion of a rigorous public procurement process, with the support of bfinance and Hymans Robertson, Private Real Estate Investment Managers have been appointed. The appointed managers are:

• UK Core Real Estate – Schroders
• International Real Estate – CBRE
• Impact / Local Real Estate – Schroders

Cllr Elwyn Williams, Chair of the Joint Governance Committee commented:

“These appointments conclude the majority of the private markets investment managers for WPP. Real Estate is a core asset class for the 8 Welsh Constituent Authorities and these managers will provide the investments they need to meet their local strategic asset allocations.”

The Wales Pension Partnership (WPP) comprises the following LGPS funds: Cardiff and Vale of Glamorgan, City and County of Swansea, Clwyd, Dyfed, Greater Gwent (Torfaen), Gwynedd, Powys and Rhondda Cynon Taf.

The Wales Pension Partnership (WPP) is pleased to announce the re-appointment of Waystone Management (UK) Limited (Waystone) as its pool operator. The re-appointment of Waystone as the FCA authorised operator follows a rigorous procurement process run by the WPP and its advisors, Hymans Robertson and Burges Salmon.

All 8 Constituent Authorities in Wales are already jointly invested in £13bn (as at end of March 2024) of pooled assets with Waystone across a range of investment strategies.

Waystone, which is the largest independent Authorised Corporate Director (ACD) in the UK, will continue to operate an Authorised Contractual Scheme (ACS; a tax efficient UK collective investment vehicle) on behalf of the WPP. The ACS has ten sub-funds across equities and fixed income that meet the needs of the Authorities, enabling them to execute their respective asset allocation strategies. With the support of Russell Investments, Waystone will continue to deliver significant fee savings.

Chris Moore, Director of Corporate Services at Carmarthenshire County Council, commented ’As the host authority for WPP we are delighted that Waystone was successful again and look forward to continue working with the team’.

Karl Midl, Country Head, United Kingdom, said: “We are delighted to have been reappointed to act as Operator to the ACS for the benefit of the WPP’s investment pool. Our continued partnership is testament to the exceptional service our team has provided over the last six and a half years, and we look forward to continuing to support the WPP’s needs as they too continue to evolve and grow.” 

Rachel Wheeler, Global Product Head of Regulated Fund Solutions, said: “As the largest player in the UK market, we bring unparalleled operational resilience, ensuring robust services for our clients. We have a long and successful history of collaboration with the WPP and we’re excited to explore new opportunities for expanding our partnership in the years to come.”

We are delighted to announce that the Wales Pension Partnership (WPP) remains a signatory to the UK Stewardship Code.

https://www.frc.org.uk/investors/uk-stewardship-code/uk-stewardship-code-signatories

The 2020 UK Stewardship Code sets a high bar for stewardship, a standard which the Wales Pension Partnership (WPP) seeks to meet through its approach to responsible investment (RI). We are therefore delighted to have retained our signatory status for 2023.

A key focus of our work over the year was the development of new Sub-Funds, including our Sustainable Active Equity Sub-Fund, which we launched in July 2023. We also broadened our fund range through the appointment of private-markets allocators across private debt, infrastructure and private equity asset classes, and we were also pleased to extend our low-carbon overlay to our UK Opportunities Sub-Fund.

Stewardship of our assets is also critical, working closely with both Robeco and Russell Investments to ensure our voice is being heard. On our behalf, Robeco voted on more than 15,000 resolutions and undertook over 200 corporate engagements across 20 separate themes. To facilitate our stewardship, we developed an updated Stewardship Framework, which provides additional focus on the themes and topics of interest to our members.

While we are pleased with how far we have come this year, we recognise that there is still much more to do. Over recent months, we have progressed work on an escalation strategy, further considered how we can better evolve stewardship within our passive allocations and updated our stock-lending policy to ensure that we vote on the entirety of our shareholdings. We also completed our inaugural All-Wales Climate Report, which we expect to publish shortly.

We remain proud of our identity as a pool, where we will continue to evolve in collaboration with all eight Constituent Authorities within Wales – and the members of their pension schemes – to be effective stewards of their assets.

The Wales Pension Partnership (WPP) will invest c.£68m into the development of onshore wind Energy Parks being developed in Wales, delivering ethical investments, and contributing to the wellbeing of future generations in Wales – as well as meeting Welsh Government targets on local and shared ownership of renewable energy projects.

This project will help deliver clean green energy to the people of Wales and beyond, addressing some of this generation’s biggest challenges and help to create a better world for future generations. This investment will contribute to the Welsh Government’s targets for electricity to be 100% renewable by 2035 and contribute to targets for 1GW of renewable electricity and heat capacity to be locally owned by 2030.

Once operational, the Energy Parks are expected to deliver approximately £800m of Community Benefit Funding to the communities living closest to the projects and will generate enough clean, green electricity to offset more than 2.6 million tonnes of CO₂ emissions a year – equivalent to c.7% of Wales’s total greenhouse gas emissions.

On 9 October 2023, the business and certain assets of Link Fund Solutions Limited were acquired by Waystone Management (UK) Limited (WMUK), part of the Waystone Group. This means that WMUK is now the operator of the Wales Pension Partnership’s (WPP) authorised contractual scheme. This does not affect the operator services which will be provided by WMUK for the remaining term of the current operator contract. WPP’s relationship team remains unchanged.

The Wales Pension Partnership (‘WPP’), the pooling entity for the eight Welsh LGPS Funds, has launched a Sustainable Global Active Equity sub-fund on its existing ACS platform. The launch further enhances the choice available to the WPP’s constituent authorities and aligns with their evolving sustainability objectives.

The new sub-fund has launched with £1.2bn, with all eight Welsh Funds participating and will see Russell Investments manage a diversified multi-manager sustainable active equity solution built to the WPP’s bespoke requirements. The solution includes five highly rated specialists (Sparinvest, Mirova, Neuberger Berman, Wellington and Artemis) identified and assessed by Russell Investments’ proprietary research framework to ensure suitability and inclusion of truly sustainable offerings.

The solution also offers the flexibility to evolve as the WPP’s requirements change, or as the sustainable landscape continues to develop, utilising Russell Investments’ Enhanced Portfolio Implementation capabilities – an infrastructure enabling customised and efficient changes to the sub-fund with a centralised portfolio management process.

Link Fund Solutions, which was appointed by the WPP as its FCA authorised Operator in 2018, is responsible for the creation and operation of the new sub-fund. Russell Investments was first appointed as WPP’s investment management solutions provider in 2018.

Commenting on the launch, Cllr Chris Weaver, Chair of the Joint Governance Committee of the Wales Pension Partnership, said:

“WPP’s long-term ambition is to demonstrate leadership on sustainability and responsible investing practices for and on behalf of the Constituent Authorities. This new sub-fund supports these ambitions in delivering both financial and broader sustainability benefits to the Authorities, and their underlying members.

Jim Leggate, Head of EMEA Sales and Clients at Russell Investments, added:

“We are delighted to have supported the Wales Pension Partnership on its journey towards meeting its long-term financial and sustainable objectives. Our bespoke solution gives exposure to a diversified set of best-in-class strategies that simultaneously stand to gain from and contribute to the transition to a more sustainable world. The appointment builds on Russell Investments’ extensive experience in designing and managing sustainable solutions for our clients.”

Karl Midl, CEO of Link Fund Solutions, added:

“As Operator of the Wales Pension Partnership, we are delighted to launch and oversee the new Sustainable Global Active Equity sub-fund. We recognise that sustainability is an increasingly important part of the investment process and we are pleased to support the Wales Pension Partnership in achieving their responsible investing objectives.”

ENDS

For more information:

WalesPensionPartnership@carmarthenshire.gov.uk

List of Constituent Authorities

• Cardiff & Vale of Glamorgan Pension Fund
• Clwyd Pension Fund
• Dyfed Pension Fund
• Greater Gwent (Torfaen) Pension Fund
• Gwynedd Pension Fund
• Powys Pension Fund
• Rhondda Cynon Taf Pension Fund
• City and County of Swansea Pension Fund

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provides the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

We are delighted to announce that the Wales Pension Partnership (WPP) remains as a signatory to the UK Stewardship Code.

https://www.frc.org.uk/investors/uk-stewardship-code/uk-stewardship-code-signatories

The 2020 UK Stewardship Code sets a high bar for stewardship, a standard which the Wales Pension Partnership (WPP) seeks to meet through its approach to responsible investment (RI). We are therefore delighted to have retained our signatory status for 2022.

Our focus for the year has been one of consolidation, reviewing our RI policies and building on our processes to ensure our pooling arrangement can better meet the needs of our beneficiaries. This year has seen more focus placed on the oversight and challenge of our providers, including undertaking deep dives into the climate and environmental, social & governance risks within our Sub-Funds. On our behalf, Robeco has voted on over 10,500 different resolutions and undertaken 280 individual company engagements. Our own focus on climate change is strongly reflected in a number of Robeco’s engagement themes and we continue to seek areas where we believe we support real-world change.

We recognise that there is still much more to do and, over the last 12 months, have appointed a dedicated RI resource to help us build on our RI commitments and meet the demands of stakeholders. We have also developed a Sustainable Active Equity strategy and a range of Private Markets funds, where consideration of stewardship and climate risk has been a focal point. We are also focusing effort on evaluating and communicating the progress the WPP has helped make on climate change over recent years.

We remain proud of our identity as a pool, where we will continue to evolve in collaboration with all eight Constituent Authorities within Wales – and the members of their pension schemes – to be effective stewards of their assets.

The Wales Pension Partnership (WPP) today announces the latest in its series of appointments to facilitate implementation of its Pooled Private Markets investment solutions.

Schroders Capital will develop the WPP pooled private equity investment programme, to meet Constituent Authorities’ needs in the asset class.

The appointment follows a rigorous procurement process run by the WPP with investment consultancy firm bfinance. The development will enable efficient and effective access to an illiquid asset class that has been a holding for LGPS funds for many years but that poses challenges in terms of access, cost and governance for single pension fund investors until scale is achieved.

Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP):

“Private Equity has been an important holding for the WPP Constituent Authorities but has historically been challenging to access in a cost effective manner. Pooling offers the opportunity to address this. We look forward to working with our newly appointed partners to meet this challenge and deliver efficient, effective and impactful Private Equity investment for the long term.”

The Wales Pension Partnership (WPP) today announces a series of appointments to facilitate implementation of its Pooled Infrastructure and Private Debt investment solutions.

Russell Investments will develop the WPP pooled private debt investment programme, GCM Grosvenor will implement closed-ended infrastructure investments and open-ended infrastructure will be invested through CBRE Global Infrastructure Fund, IFM Global Infrastructure Fund and Octopus Renewables Infrastructure SCSp.

The appointments follow a rigorous procurement process run by the WPP with investment consultancy firm bfinance. The development will enable efficient and effective access to illiquid asset classes that are fast becoming significant holdings for LGPS funds.

The WPP’s Joint Governance Committee was established in 2017 and is responsible for oversight of the pool’s partner organisations and the services they deliver to the LGPS funds in Wales.

Carmarthenshire County Council acts as Host Authority, liaising day to day with the Pool’s external partners, on behalf of all of the LGPS funds in Wales.

Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP):

“Alternative asset classes have historically been challenging to access in a cost-effective manner. Pooling offers the opportunity to address this challenge. The WPP’s constituent funds have increasing strategic demand for these investments, and we look forward to working with our newly appointed partners to meet this demand.”

We are thrilled and honoured to announce that we were successful in winning Pool of the Year at the LAPF Investment Awards 2021, which took place in London on 29 March 2022.

We would like to thank all the 8 LGPS funds in Wales and our external providers for their continued support, our stakeholders and all involved in managing and providing an exceptional service to the WPP.

We are delighted to announce that the Wales Pension Partnership (WPP) is now a signatory to the UK Stewardship Code.

https://www.frc.org.uk/investors/uk-stewardship-code/uk-stewardship-code-signatories

The 2020 UK Stewardship Code sets a high bar for stewardship, a standard to which the WPP sought to meet through its approach to responsible investment. The WPP is therefore delighted to be recognised as a signatory to the Code. 

Our report for the year ending 31 March 2021 covered the first step on WPP’s journey, a year when we put in place solid foundations through our appointment of Robeco as a stewardship provider, the establishment of our Responsible Investment Sub-Group and began the process of ensuring that our policy commitments were implemented.  We also worked closely with Link Fund Solutions and Russell Investments during the year to develop and implement an innovative decarbonisation strategy for our Global Opportunities Fund, a process that we have since sought to extend to our other Sub-Funds.

We recognise that there is much more to do but we remain committed to building our understanding of responsible investment practices and evolving our approach.  We learned much from the reporting process and have already taken steps to implement some of those learnings, for example, through increasing the scrutiny of our providers and the assets they manage for us.  We do this recognising that the WPP has a responsibility to all eight Constituent Authorities within Wales, and the members of their pension schemes, to be effective stewards of their assets.

Statement from the Wales Pension Partnership and the LGPS in Wales

We are deeply saddened by the situation in Ukraine and our thoughts are with the Ukrainian people. 

Our total exposure to Russian Investments is minimal at less than 1%. Even so, in light of the terrible events we have witnessed and the economic sanctions imposed internationally, as a collective we have decided to divest from these holdings as soon as is practically possible.

Given the circumstances we do not believe that engagement with these companies presents a viable option.

Cllr Clive Lloyd

For and behalf of the Wales Pension Partnership and the LGPS in Wales

The Wales Pension Partnership (WPP) is pleased to announce the launch of the LF Wales PP Emerging Markets Equity Fund on 20th October 2021 with an AUM of £505m. Link Fund Solutions Limited, as Operator of the Fund, have appointed investment solutions provider Russell Investments Limited as Portfolio Manager of the multi-manager strategy. The Fund will leverage Russell Investment’s Enhanced Portfolio Implementation (EPI) framework, in order to reduce aggregate levels of trading and to provide the WPP with improved governance and control from an ESG perspective. The Fund aims to achieve reduced carbon footprint and carbon reserves at Sub-fund level, targeting 25% lower than the MSCI EM Index.

Sub-delegates include; Artisan Partners, Axiom International Investors, Bin Yuan Capital, Barrow Hanley Global Investors, Numeric Investors and Oaktree Capital Management.

The Wales Pension Partnership (‘WPP’), the pooling entity for the eight Welsh LGPS Funds, has implemented a new decarbonisation initiative across the £2.5bn of its global equity assets managed by Russell Investments.

This will see the WPP’s global equity mandate achieve a targeted reduction in both its carbon footprint and fossil fuel reserves exposure by 25% relative to its benchmark (the MSCI All Country World Index). The portfolio will also exclude companies that rely on coal to generate revenues.

The WPP is utilising Russell Investments’ Enhanced Portfolio Implementation (EPI) infrastructure to achieve its decarbonisation targets.

EPI leverages a centralised trading and portfolio management process with Russell Investments responsible for executing the investment strategies of the WPP’s underlying fund managers. With this framework, the WPP is able to benefit from greater control and customisation around decarbonisation and other ESG-related objectives. EPI also seeks to deliver trade efficiencies through sizeable reductions in trading activity.

The decarbonisation initiative represents a positive step towards the WPP’s climate related and wider ESG goals.

Commenting on the launch of the new decarbonisation initiative, Cllr Glyn Caron, chair of the Joint Governance Committee at the Wales Pension Partnership, says:

“Climate change not only poses significant challenges for society; it also represents a financial risk for our Constituent Authorities and scheme members. By reducing the carbon exposure within our active equity assets, in partnership with Russell Investments, we are seeking to address these challenges. We see this as a positive first step in meeting our long-term sustainability goals.”

Jim Leggate, Managing Director, UK Institutional & Middle East at Russell Investment, also comments:

“Issues around climate change and the transition to a low carbon economy are increasingly critical issues that institutional asset owners are seeking to address. We are pleased to support the WPP in their carbon reduction objective as part of a wider framework designed to reflect the evolving needs of their members. Through our Enhanced Portfolio Implementation framework, we are well positioned to deliver a holistic, efficient and low-cost customised solution that evolves with the combined long-term sustainability goals of the WPP’s Constituent Authorities.”

Eamonn Gough, Senior Relationship Manager at Link Fund Solutions, adds:

“As an engaged asset owner, the WPP understands the crucial importance of supporting the transition to a low carbon economy.  The enhanced implementation framework being utilised has the advantage of keeping the existing underlying managers and the broad operating structure whilst enabling the WPP to achieve aggregate portfolio decarbonisation.”

ENDS

For more information:

WalesPensionPartnership@carmarthenshire.gov.uk

Notes to Editors:

* List of Constituent Authorities

• Cardiff & Vale of Glamorgan Pension Fund
• Clwyd Pension Fund
• Dyfed Pension Fund
• Torfaen Pension Fund
• Gwynedd Pension Fund
• Powys Pension Fund
• Rhondda Cynon Taf Pension Fund
• City and County of Swansea Pension Fund

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provides the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

We are delighted to have won the Innovation Award at LAPF Investments Awards 2020.

Like other pools, we adopted a multi-manager approach to fund construction, to deliver the strongest possible risk-adjusted returns while achieving significant savings. However, this award recognises we made a significant step in innovation, adopting an “Enhanced Portfolio Implementation” (EPI) framework within our equity funds.

Managed by Russell Investments (within our ACS fund structure hosted by Link Fund Solutions), EPI brings the implementation of multiple equity manager portfolios into one holistic portfolio. Whilst new to LGPS, this leverages proven technology and has two significant benefits for our host authorities:

1. Meaningful cost savings over and above the manager fee savings already achieved;
2. Improved Governance from an ESG perspective: we have taken steps to lower our carbon exposure by an additional ~25% without impacting manager alpha. This is hugely powerful in supporting our administering authorities’ work towards their decarbonisation goals.

Not only has this been powerful for our members, but we believe this step also demonstrates that LGPS pooling can go beyond manager fee negotiations, accessing a second tier of cost saving and improved governance.

The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh LGPS funds, has launched a series of fixed income funds on its existing ACS platform to provide a choice of sub-funds to implement their fixed income investments based on their strategic asset allocations. All eight constituent authorities* will be investing in at least one of these sub funds.

The new pooled investments will be comprised of five sub-funds focused on global credit, global government bonds, absolute return bonds, multi-asset credit and UK credit. Apart from UK credit, the other four sub-funds will be managed by Russell Investments and utilise a range of generalist and specialist fixed income managers to deliver enhanced risk-adjusted returns.

Link Fund Solutions, which was appointed by the WPP as its FCA authorised Operator in 2018, is responsible for creating and operating the new fixed income platform structure.

The single-manager UK credit strategy will launch with £550 million while the four sub-funds managed by Russell Investments range in size between £430 million and £780 million.

Commenting on the launch of the new fixed income platform, Cllr Glyn Caron, Chair of the Joint Governance Committee, says:

“As investment markets become more complex, we recognise that more sophisticated investment solutions are needed to meet the long-term objectives of our eight Constituent Authorities*. Working with Russell Investments and Link Fund Solutions, we believe these funds will provide us with the ability to optimise our exposure to fixed income markets while delivering on our objectives to improve diversification and reduce our costs”.

Jim Leggate, Managing Director, UK Institutional & Middle East at Russell Investment, also comments:

“We are very pleased to expand our relationship with the Wales Pension Partnership following our original appointment in 2018 as the investment management solutions provider. With this launch, we are now responsible for managing £5.2 billion of WPP’s assets across equities and fixed income. The progress we have all made to date is a testament to the great collaboration of many individuals across all eight constituent authorities*, including officers, members and their advisers.”

Eamonn Gough, Senior Relationship Manager at Link Fund Solutions, adds:

“WPP understands the need to employ a sophisticated investment solution to meet its investment objectives in what is a challenging market environment. We believe this platform meets these requirements and allows WPP to access the expertise of some of the world’s leading fixed income managers.”

ENDS

For more information:

WalesPensionPartnership@carmarthenshire.gov.uk

Notes to Editors:

* List of Constituent Authorities

• Cardiff & Vale of Glamorgan Pension Fund
• Clwyd Pension Fund
• Dyfed Pension Fund
• Torfaen Pension Fund
• Gwynedd Pension Fund
• Powys Pension Fund
• Rhondda Cynon Taf Pension Fund
• City and County of Swansea Pension Fund

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provides the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

The Wales Pension Partnership (‘WPP’) Is pleased to present its first annual update. The progress made over the past twelve months reflects the ability of the eight Welsh Constituent Authorities to work together to deliver their shared set of objectives. Some significant milestones have been achieved during the year and it is extremely pleasing to see that these milestones have been extended across a variety of fields, including, Investments, Governance, Communications and Training. The annual update can be found under the Publications section, please click here.

The Wales Pension Partnership (‘WPP’) is pleased to announce the appointment of Robeco UK, a branch of Robeco Institutional Asset Management B.V (‘Robeco’) as the WPP’s Voting and Engagement provider. Robeco were appointed following the completion of a comprehensive procurement exercise. Robeco’s contract will commence on 1 April 2020 and will run for an initial period of 3 years with the potential for a 2-year extension.

Robeco will assist the WPP in formulating and maintaining a Voting Policy and Engagement Principles that are in keeping with the Welsh Constituent Authorities’ membership of the Local Authority Pension Fund Forum (‘LAPFF’)

Robeco will be tasked with helping WPP formulate its Voting Policy, this work will be carried out in collaboration with the eight Welsh Constituent Authorities over the course of the next six months. Following this, Robeco will take responsibility for implementing the Voting Policy across WPP’s £5bn active equity portfolio and reporting to WPP and the underlying Funds.

Additionally, Robeco will assist the WPP in framing its Engagement Principles and will undertake engagement activity on behalf of the WPP in accordance with the agreed principles. As part of its remit Robeco, will embrace WPP’s track record of collaborating with likeminded partners, policy makers and regulators to ensure that WPP achieves the most effective engagement outcomes.  Robeco will also provide reporting and training on the WPP’s engagement activities at both a Pool and Constituent Authority level.

WPP will publish its Voting Policy and Engagement Principles on this website once they have been finalised.

The WPP believes that Responsible Investment alongside consideration and evidential management of Environmental, Social and Governance issues should result in better outcomes for WPP’s stakeholders. The appointment of Robeco evidences the WPP’s continued delivery of the commitments made in its Responsible Investment Policy and its vow to exercise its voting rights in line with the interest of its stakeholders and engaging with investee companies to enhance the long-term value of the Constituent Authorities’ investments within WPP.

The Wales Pension Partnership (WPP), the pooling entity for the eight Welsh LGPS Funds, has announced a new Responsible Investment (RI) policy, highlighting its commitment to responsible investment and desire to be a leader in this area.

The new overarching policy was developed collaboratively by the WPP and its eight Constituent Authorities* and will be adopted by them all. At the same time, it will allow individual Constituent Authorities to maintain and develop their own RI policies.

Commenting on the development of the new RI policy, Chris Moore, Director of Corporate Services from the WPP Host Authority, says: “Responsible investment policies are vitally important not only to the administration of our funds but to the future of Wales. We recognised how crucial it was for the WPP to establish its own responsible investment policy and aimed to ensure that all stakeholders of the WPP were represented in the policy’s development. Building support and gaining consensus among the Constituent Authorities was imperative. We needed to be sure that the policy was representative of the broad range of investment beliefs within the Pool. We are thrilled to have agreement on a policy that can now be implemented on behalf of the underlying Constituent Authorities. We are all highly committed to seeing this new ambitious RI Policy succeed.”

In its new RI policy, the WPP has agreed to prioritise a number of actions over the next 12 months, including developing a specific climate risk policy and engaging with its investment managers to develop an appropriate set of RI monitoring metrics.

The full RI policy can be found on the Wales Pension Partnership website.

* List of Constituent Authorities

• Cardiff & Vale of Glamorgan Pension Fund
• Clwyd Pension Fund
• Dyfed Pension Fund
• Torfaen Pension Fund
• Gwynedd Pension Fund
• Powys Pension Fund
• Rhondda Cynon Taf Pension Fund
• City and County of Swansea Pension Fund

About WPP

The Wales Pension Partnership (WPP) was established in 2017. The WPP is a collaboration of the eight LGPS funds (Constituent Authorities) covering the whole of Wales and is one of eight national Local Government Pension pools.

It has a long, successful history of collaboration, including examples that pre-date the Government’s pooling initiative. It is proud of its unique identity as a Pool – its Constituent Authorities represent and span the entirety of Wales. Being democratically accountable means it provide the best of strong public sector governance and transparency.

WPP’s operating model is designed to be flexible and deliver value for money. It appointed an external Operator and makes use of external advisers to bring best of breed expertise to support the running of the Pool. The Operator is Link Fund Solutions and they have partnered with Russell Investments to manage the investments and assist in the reduction of investment management costs for all the Constituent Authorities.

The Wales Pension Partnership (WPP) today announces the appointment of Link Fund Solutions Ltd (Link) to establish and run a collective investment vehicle for the sole use of the Local Government Pension Scheme (LGPS) funds in Wales.

The appointment of Link as the FCA authorised operator follows a rigorous procurement process run by the WPP and its advisors, Hymans Robertson and Burges Salmon. This will enable the pooling of circa £15bn of assets across a range of asset classes. The passive mandates of all 8 LGPS funds in Wales are already jointly invested, delivering estimated fee savings of over £2m per annum on assets in excess of £3bn. The appointment of Link represents another key milestone in the pooling process, working towards the Westminster Government’s April 2018 target date.

Link will establish and run an Authorised Contractual Scheme (a tax efficient UK collective investment vehicle) on behalf of the WPP. The ACS will have sub-funds in a range of asset classes that will meet the needs of the investing authorities, enabling them to execute their differing asset allocation strategies. With the support of Russell Investments, and in consultation with the eight individual local authority funds, Link will begin the process of appointing a number of investment manager firms, while the LGPS funds will retain full control over strategic asset allocation decisions. By using fewer investment manager firms with larger mandates, it is expected that the pool will deliver fee savings, one of the primary aims of Government policy.

The WPP’s Joint Governance Committee was established earlier in 2017 and is responsible for oversight of the pool’s operator, Link, and the services it delivers to the LGPS funds in Wales.

Councillor Stephen Churchman, Chairman of the Joint Governance Committee: “After a rigorous selection process, we are delighted to announce the appointment of Link as the operator company for the LGPS investment pool for Wales. The LGPS administering authorities in Wales have a long and successful history of collaboration. We are on track to have the pool operational in early 2018 delivering further investment manager fee savings that will benefit all of the LGPS funds in Wales.”

Carmarthenshire County Council acts as Host Authority, liaising day to day with the operator, Link, on behalf of all of the LGPS funds in Wales.

Chris Moore, Director of Corporate Services at Carmarthenshire County Council (Host Authority for the WPP):

“The appointment of Link is a significant milestone in the establishment of a £15bn investment pool for the LGPS funds in Wales. We look forward to working with Link to deliver the benefits of investment pooling for the LGPS in Wales.”

The Wales Pension Partnership (WPP) comprises of the following LGPS funds: Cardiff and Vale of Glamorgan, City and County of Swansea, Clwyd, Dyfed, Greater Gwent (Torfaen), Gwynedd, Powys and Rhondda Cynon Taf.