Investment Strategy
The London Pensions Fund Authority (LPFA) manages approximately $10 billion in pension assets for current and former employees of London-based public sector organizations, including the former Greater London Council and other abolished London authorities. The fund serves over 90,000 members and is one of the more prominent LGPS funds based in the capital.
LPFA’s investment strategy is driven by its liability profile, which reflects a mature fund with a high ratio of pensioners to active members. This maturity shapes the fund’s approach to asset allocation, placing emphasis on cash flow generation, liquidity management, and liability matching alongside long-term growth. The portfolio spans public equities, fixed income, real estate, infrastructure, private equity, and private credit.
The fund’s investment management is handled by Local Pensions Partnership Investments (LPPI), a pooling arrangement established initially between LPFA and Lancashire County Pension Fund. LPPI manages assets across public and private markets on behalf of its partner funds, providing professional investment management, operational scale, and fee negotiation power.
LPFA maintains strategic oversight of its asset allocation and investment objectives while delegating implementation to LPPI. This governance model allows the fund’s board to focus on liability management, employer engagement, and strategic priorities.
Private Markets Approach
LPFA’s private markets exposure is managed through LPPI’s dedicated alternatives team. The program spans private equity, infrastructure, real estate, and private credit, with allocations reflecting the fund’s need for both return generation and income stability.
Private equity investments are made through LPPI’s pooled private equity vehicles, which commit to a diversified set of buyout, growth equity, and co-investment opportunities globally. LPPI selects managers based on track record, strategy differentiation, and alignment with the partnership’s portfolio construction objectives.
Infrastructure is a meaningful allocation for LPFA, reflecting the asset class’s ability to provide inflation-linked returns and stable cash flows. LPPI’s infrastructure program spans core and core-plus strategies across energy, transportation, digital infrastructure, and social infrastructure in the UK and globally.
Real estate exposure includes UK commercial property and international real estate strategies. LPFA has historically maintained a significant property allocation, reflecting both return expectations and the income characteristics of real estate as an asset class.
Private credit has grown in importance as LPFA and LPPI have sought to diversify the partnership’s income-generating portfolio beyond traditional fixed income. LPPI’s credit program includes exposure to direct lending, asset-backed lending, and special situations.
How to Approach
Fund managers seeking to work with LPFA should direct their engagement to Local Pensions Partnership Investments (LPPI). The LPPI investment team handles manager selection, due diligence, and commitment decisions for the partnership’s private market programs.
LPFA’s own team in London is focused on governance, strategic asset allocation, and employer management rather than individual manager selection. However, understanding LPFA’s strategic priorities and liability profile can inform how a GP positions its strategy within the LPPI framework.
GPs should be prepared to demonstrate clear alignment with LPPI’s investment criteria, including track record consistency, fee competitiveness, operational resilience, and ESG integration. LPFA has been an active voice in responsible investment within the LGPS community.
Frequently Asked Questions
How much does the London Pensions Fund Authority allocate to alternatives?
LPFA targets approximately 15% of its portfolio in alternative investments including private equity, infrastructure, and private credit. The fund's alternatives program is managed through the Local Pensions Partnership Investments (LPPI), which handles asset management on behalf of LPFA and other partner funds. This pooling arrangement provides LPFA with access to institutional-quality private market strategies at scale.
How can fund managers approach the London Pensions Fund Authority?
Fund managers should engage through Local Pensions Partnership Investments (LPPI), which manages investment activity on behalf of LPFA. The LPPI team handles manager selection across all asset classes including private equity, infrastructure, and credit. LPFA's own team in London focuses on strategic oversight, liability management, and governance rather than individual manager selection.
What is LPFA's typical commitment size?
Through LPPI, LPFA participates in commitments that typically range from $20 million to $75 million per fund. The pooled nature of LPPI's investment vehicles means that the total capital committed to a given manager from across the partnership can be substantially larger, giving GPs meaningful check sizes while providing LPFA with appropriate diversification.
