Lewisham Pension Fund Reallocates £95 Million to Credit and UK Bonds, Reducing Equity Exposure
Lewisham Pension Fund is set to increase its holdings in credit and UK government bonds as part of a revised investment strategy, a move influenced by new LGPS governance and pooling regulations. The changes, approved by the Pensions Committee on Thursday 15 October 2026, will see £95 million reallocated from the London CIV Passive Paris Aligned Equity Fund to the London CIV All Maturities Buy & Maintain Credit Fund. Further allocations to index-linked government bonds are also planned.
This strategic shift aims to better align the fund's portfolio with its agreed strategic asset allocation and reduce its reliance on volatile equity markets. The rationale behind reducing exposure to the London CIV Passive Paris Aligned Equity Fund, specifically, was that its initial equity exposure was 'higher than was warranted by the risk characteristics of the portfolio.' Equity is described as 'inherently more volatile' and a class where 'markets can have significant drawdowns'. The move was part of a broader rebalancing programme designed to enhance the fund's long-term financial sustainability.
Officers, working with the London Collective Investment Vehicle (LCIV), have finalised an implementation plan for the revised Investment Strategy Statement (ISS). This plan is intended to deliver the fund's strategic objectives while also adhering to new LGPS governance and pooling regulations. These regulations include 'new LGPS fund governance guidance' and 'new LGPS governance and asset pooling guidance issued in June 2026', which mandate participation in a single FCA-authorised asset pool. The 'Fit for the Future' reforms and the 'Pension Schemes Act 2026' place responsibility for investment implementation with the pools, while administering authorities retain responsibility for setting high-level objectives, with an expectation of enhanced governance, transparency, and accountability.
The full details of the revised strategy and implementation plan can be found in the Public reports pack for the 15th October 2026 Pensions Committee meeting. Further information on previous committee minutes is available in the Minutes Public Pack 11 June 2026 Pension Committee.