Lambeth Pension Fund's investments in fossil fuels total £6 million, according to a recent Pensions Committee meeting. As of March 31, 2025, the fund's exposure to fossil fuels represented approximately 0.33% of its total assets. The committee will evaluate the fund's Responsible Investment beliefs as part of the forthcoming investment strategy update. The Lambeth County Investment Pool (LCIV) believes that engagement is more likely to encourage a change of approach and better human rights outcomes than divestment.
The figure was revealed as part of the Investment Performance Report - Q1 2025, which summarised the performance of the fund's managers for the quarter ending on that date. According to the report, the market value of the fund's assets stood at approximately £1,794.6m, marking a decrease of £57.7m from the previous quarter.
The Investment Performance Report - Q1 2025 noted that the fund had underperformed against its benchmark by 1.3% in the first quarter of 2025. This underperformance was attributed to challenges in the global equity, emerging market equity, and UK Private Rented Sector (PRS) funds. According to Sandy, the fund's performance over the last year and three years has been below expectations, remaining fairly flat compared to a benchmark underperformance of 3.2% over the last three years.
The report also highlighted that as of March 31, 2025, the fund's asset allocation was overweight in multi asset credit (MAC) and global equity, while underweight in private equity and private debt. The overweight allocation to MAC is largely a legacy position where funds were warehoused to be used to finance private debt capital calls as and when they arise. The fund's UK exposure was approximately 23.2%, amounting to £417.1m. A comparison to its benchmark or other similar pension funds was not provided in the report.
The Pensions Committee, chaired by Councillor Martin Bailey, reviewed the Lambeth Pension Fund Risk Register and proposed additional actions to mitigate risk. The Pensions Committee is commissioning a third-party governance review of the fund to assess the effectiveness of the Pensions Board and Committee, the appropriateness of the fund's officer team structure and governance arrangements, and compliance to the General Code of Practice. The review will take place over the summer, with results expected at the next round of autumn meetings.
While the long-term performance goals for the Lambeth Pension Fund are not explicitly stated, the fund aims to achieve 100% solvency over a period of 17 years. Progress towards these goals is measured through actuarial valuations conducted every three years, which assess the funding level and set employer contribution rates.
