Sixty second summary
Pool oversight - getting the most from asset pooling
03 Jun 2019 - Estimated reading time: 1 minute
- Asset pooling means that a range of investment decisions, which previously sat with the Local Funds, will now be delegated to/facilitated by the Pools.
- Although delegated, individual Funds’ Committees continue to have ultimate responsibility for their assets and the returns generated. Lessons can be learned from the private sector’s experience of increased delegation, including the need for: well-defined objectives, transparency on performance and fees and oversight of the delegated parties.
- Robust and independent pool oversight can help Committees demonstrate strong governance of their Pool.
Pooling: the new framework
Since the Chancellor’s 2015 Autumn statement, considerable work has taken place and eight pools have been established. Assets are gradually transitioning, with more to follow, as Pools’ sub-funds are launched. To date, Officers' and Committees’ focus has been on establishing the Pools and setting out their investment requirements. However, as Pools increasingly take responsibility for performance, it is important that appropriate success measures and reporting are in place to allow assessment relative to these measures.
Asset pooling represents significant change for the LGPS. For most Pools, several investment decisions that previously sat with the Local Funds are now being delegated to the companies with responsibility for the Pools e.g. the Pool’s Operator. We summarise some of the key changes in our full summary.