LGPS Central doubles in size; looks to add more alternatives

LGPS Central, one of the United Kingdom's Local Government Pension Scheme pools, has achieved near-doubling of its assets under management to £100 billion ($132 billion) as a direct result of government-mandated pension pool consolidation. The UK government's pursuit of economies of scale in public sector pensions led to the elimination of two competing pools—ACCESS and Brunel Pension Partnership—and forced their underlying pension funds to migrate to alternative pools. LGPS Central emerged as the preferred destination, attracting six new client funds that increased its partner fund count from eight to 14.

The scale of asset growth reflects both organic consolidation and the composition of managed assets across multiple management structures. Pooled assets administered directly by LGPS Central expanded from £19 billion in 2022 to approximately £50 billion at present. However, approximately £18 billion remains managed by partner funds through legacy arrangements with external managers, encompassing both active and passive strategies across public and private markets. LGPS Central has already commenced transfer of these legacy assets into its pooled structure.

Jayne Atkinson, Chief Investment Officer who joined LGPS Central six months prior to this reporting, emphasized the operational shift required by the organization's expansion. "I wanted to join an LGPS pool that's on the way up," Atkinson stated in a rare interview with Top1000funds.com. She outlined the necessity for the organization to adopt institutional practices and infrastructure commensurate with its new scale, requiring "thinking and acting like a £100 billion asset manager" with expanded service offerings and broader asset class exposure.

Strategic expansion into alternative assets represents a core element of LGPS Central's growth mandate. Planned allocations include hedge funds, diversified growth funds, and insurance-linked securities—asset classes that require specialized expertise and operational infrastructure. This diversification aligns with broader trends across LGPS pools toward alternatives as consolidation deadlines approach.

Government policy has established March 2026 as the deadline for consolidation of all LGPS assets into pooled structures, though policy allows "limited flexibility" for pension funds transitioning to alternative pools. This mandate creates operational urgency for completing asset transfers and integrating legacy management arrangements into LGPS Central's centralized framework.