The establishment of a common investment vehicle for pensions investment operated on behalf of London Boroughs is “clearly feasible” and with a minimum level of buy-in is “financially attractive” according to a report from the London’s Councils Leaders’ Committee Pensions Working Group.

The report did however state that “it does require a level of buy in at a political as well as technical level from councils to establish whether the initial interest of boroughs can be converted into real interest to make the initial investment in setting up the CIV worthwhile.”

This latest report follows on from previous discussions on the potential for more collaboration between those London boroughs that wished to do so, on the management and investment of pension funds. The Working Group stated that savings could be made from the joint administration of investments and/or benefits administration.

In March 2012, Leaders’ Committee received a report from the London Pensions Fund Authority (LPFA) on the potential for a London pension mutual and a common investment vehicle (CIV). The Society of London Treasurers (SLT) also provided advice to Leaders’ Committee on the potential for both a mutual and a CIV. The CIV would allow boroughs to retain autonomy in asset allocation and funding strategy and would contain a host entity working within new governance arrangements. It would establish a choice of funds within each asset class, select fund managers and negotiate and monitor fee levels.

The report stressed that participation by London Boroughs would be entirely voluntary .

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