UK Collaborations Gather Pace as Deadline Looms

The Local Pensions Partnership (LPP)—a £10 billion ($13 billion) collaboration between two UK public pensions—has announced its first pooled mandate.

The partnership between the London Pension Fund Authority (LPFA) and the Lancashire County Pension Fund (LCPF) has launched a £1.2 billion property mandate, the LPP said in a statement today. It will combine £850 million of cash from both pensions with their existing direct assets.

Knight Frank Investment Management has been appointed to oversee the allocation, and will combine “specialist income and value-add strategies,” the LPP said.

It is the first formal investment collaboration between the two pensions since the LPP was given regulatory approval earlier this year.

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“This allocation extends further the strategic partnership between LCPF and LPFA through the Local Pensions Partnership,” said Co-CIO Chris Rule. “We’re pleased to not only be talking about collaboration and pooling across the Local Government Pension Schemes [LGPS], but actively engaging in it.”

“We are of the view that the best outcome for Berkshire will be to become a shareholder partner in LPP.”While the country’s political landscape continues to shift following last month’s referendum, behind the scenes the LGPS have all but finalized plans to pool their investments ahead of the government’s July 15 deadline for proposals.

The £1.7 billion Berkshire Pension Fund is set to become the third partner in the LPP following a committee meeting on Monday. Pension Fund Manager Nick Greenwood recommended to the fund’s board that Berkshire join the LPP.

“While the government’s insistence on mandatory pooling of English and Welsh LGPS funds’ investments is not entirely welcome, we are of the view that the best outcome for Berkshire will be to become a shareholder partner in LPP,” Greenwood wrote in a briefing document.

His report added that, on agreement of the partnership, Greenwood will join the LPP’s investment committee alongside Co-CIOs Rule and Mike Jensen. Berkshire has expressed a desire to retain up to 10% of assets outside of the LPP, primarily to invest in local projects.

Greenwood previously attempted to pool Berkshire’s investments with those of the Oxfordshire and Buckinghamshire in 2014, before the UK government’s nationwide plans were announced. However, “Project BOB” was abandoned in December 2014 after Berkshire’s partners pulled out.

Elsewhere, the London CIV last month added two funds to its lineup as it continues to pool the capital’s 33 local authority pensions’ assets. The new funds are both “absolute return” multi-asset products, run by UK boutiques Ruffer and Pyrford International, part of the BMO Global Asset Management. The London CIV has launched five pooled funds so far under the watch of CIO Julian Pendock.

Karyn WilliamsCIO Karyn Williams is leaving Farmers Insurance to serve as Two Sigma’s first head of client solutions, the hedge fund announced Tuesday.

Williams was named investment chief last August after three years as head of insurance investments at Farmers. While at Farmers, Williams was responsible for redesigning the fund’s investment process, shifting it to a largely outsourced investment model.

“Karyn has done a tremendous job in helping to bring investment management at Farmers to a new level,” said CFO Scott Lindquist at the time of Williams’ promotion.

Maite Irakoze Baur, head of insurance investments at Farmers, will serve as acting CIO while the insurer conducts a search for a permanent replacement.

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At Two Sigma, Williams will focus on data- and technology-driven products, as well as oversee the firm’s advisory business.

“We are at a watershed moment in institutional investing—every basis point matters in a market that is operationally and structurally very different since the financial crisis,” she said in a statement. “I’m excited to work with the team at Two Sigma to develop holistic solutions that put investors first.”

Two Sigma CEO Nobel Gulati said Williams’ background made her a perfect choice for the newly created role.

“Karyn’s experience as an allocator, consultant, and trustee uniquely positions her to partner with our clients to develop asset allocation, risk optimization, and execution solutions,” he said.

Prior to joining Farmers in 2013, Williams spent 12 years at Wilshire Associates as a senior consultant for large institutional investors. She holds a PhD in finance from Arizona State University.