LGPS funds close first private equity fund

Private_equityA number of local government pension schemes are celebrating their first private equity fund that took six months to get established and funded.

LGPS Central – the asset manager owned by nine schemes from the UK Midlands - said it had a final funding close of its first private equity fund on January 31, 2019.

The fund – called the LGPS Central Limited 2018/19 Vintage Private Equity Fund – took six months “of comprehensive work to find the right legal structure, obtain regulatory approval and source and implement the necessary finance, IT and operations infrastructure”.

Omar Ghafur private equity investment director at LGPS Central, said: “Given that we started with a blank sheet of paper, and brought together the various parts of the organisation – investments, finance, legal, operations and compliance – to structure and launch this fund, I’m immensely proud we were able to conclude this process in such a short time frame.”

The fund’s investors are the Cheshire Pension Fund, Leicestershire County Council Pension Fund, Nottinghamshire County Council, Staffordshire Pension Fund and West Midlands Pension Fund. LGPS Central consists of nine funds overall.

The private equity fund will consist of “annual vintages” investing in a mix of fund and direct private equity investments with a view to reducing the high external costs associated with private equity and therefore enhancing risk-adjusted returns, Ghafur said.

LGPS Central expected to deploy in excess of £2 billion (€2.28 billion) “over the coming years” in private equity.

The nine funds have approximately £44 billion of collective assets in total while LGPS Central manages or advises on £14 billion of assets that the funds have pooled together.

The schemes have pooled assets to diversify their investments and make cumulative costs savings of £250 million over 15 years.

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