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London Pensions Fund Authority puts cash portfolio into GLA pool

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The London Pensions Fund Authority (LPFA) has deposited the bulk of its cash portfolio with the Greater London Authority.

The LPFA’s cash portfolio will be managed alongside the GBP2bn GLA Group Investment Syndicate (GIS) on an interim basis while the LPFA concludes formally joining the framework.
 
The decision will see the LPFA benefit from enhanced liquidity and increased returns from the scale of transactions and the GLA’s strong money market relationships. In return, the GIS investment strategy will in future be considered by the LPFA’s investment committee.
 
Luke Webster, the LPFA’s director of finance, will lead the combined treasury team in partnership with the GLA.
 
Webster says: “Pooling cash makes massive sense when properly managed. The synergy of different organisations’ cash flows means on average, funds can be invested for longer, attracting a liquidity premium and therefore better returns. This commitment underlines our philosophy of collaboration, promoting knowledge-sharing, delivering economies of scale and helping to create centres of excellence within the public pensions sector.”
 
This collaboration will provide the LPFA with a better cash management outcome without extensive additional investment. Furthermore, joining the GIS will reduce overall administration, cost and transaction risks and will also cut out duplication of custody and execution facilities within the group.
 
This move is in line with the Mayor of London’s shared service agenda, delivering efficiency, increasing service resilience, providing scope for team development and achieving sufficient economy of scale to justify collective investment in improved systems and processes.

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