What will happen to members’ unlisted assets?
There is an acceptance by government that the type of assets we hold, for example Surrey’s private equity vehicles, will not transition across because they are in Surrey’s name and it does not make sense to transition those across. Another example is Cumbria’s direct-held property and because of stamp duty you cannot transition those. So there will be a residue of unlisted assets that will remain under the control of each individual authority with an acceptance that those will have been liquidated within 15 years. It is expensive to come out of these vehicles and we don’t want to take a hit unnecessarily. The transition process will require a good deal of planning because obviously we want the best deal for each of the funds so they don’t take too much of a hit in costs.
Is the BCCP closed to new members now?
Whoever was in at 19 February has founding partner status and anyone who applies to come in after then would have to have unanimous approval from the 13 authorities as to whether a new member can enter. In terms of efficient management we have said anything between 10 and 14 members is at the optimum level.
What is the plan for targeting infrastructure specifically, as emphasised by the Chancellor?
We are around 3.8% in terms of the current allocations for the whole pool. I think in terms of the capacity and appetite to invest in infrastructure, that decision has got to come from each of the funds. The appetite will vary and for Surrey, we have a positive cashflow which will continue for at least another decade so we can look longer term in our investment strategy, which does lend
itself to infrastructure investing. Other funds within the pool are cashflow negative so the risk appetite is different. We are not mandated to invest in infrastructure but we are working on the basis that the Chancellor has this ambition for us.
So the Treasury did not stipulate that you had to invest in infrastructure?
We are required to set out an ambition that there will be that capacity and willingness.
Has the active/passive debate within the LGPS died?
The fact we have got our act together and now have six pools with viable propositions is exciting. It is a remarkable time period; in less than three months since the proposal was published in November, the whole of the LGPS has mobilised themselves and set to work on this. It has been a remarkable journey travelled. I think if we had failed in this task, the active/passive debate would have resurrected itself.
