Hammersmith and Fulham Pension Fund has officially joined the London Collective Investment Vehicle (LCIV) for asset management, a significant step in aligning its investment strategy with broader LGPS pooling requirements. The Pension Fund Committee approved the final legal agreement, the Investment Management Agreement (IMA), between the fund and the LCIV on Tuesday, March 17, 2026. This agreement, effective from April 1, 2026, brings the fund's assets under the LCIV's pooled management structure.
This move is a direct response to the Pensions Schemes Bill and draft LGPS regulations, which mandate that LGPS funds invest their assets through designated pools. The Fit for the Future
legislation requires funds to invest entirely with London CIV products from March 31, 2026, with exceptions for passive products, operational cash, and directly held legacy assets. The LCIV will be responsible for implementation decisions such as geographic allocation and active versus passive management.
The Hammersmith and Fulham Pension Fund's assets will be invested across several asset classes through the LCIV, guided by the Investment Strategy Statement. The target allocation includes 40% in Equities (currently 46.6%), comprising passive equities managed by L&G and BlackRock, and active equities managed by LCIV (Morgan Stanley). Dynamic Asset Allocation accounts for a 25% target (currently 24.2%), including Absolute Return strategies managed by Ruffer, and B&M Credit managed by Allspring and LCIV (Insight). A 20% target is set for Secure Income (currently 15.5%), with investments in Multi Sector Private Credit (Aberdeen), Infrastructure (Partners Group), and Renewable Infrastructure (Quinbrook). Inflation Protection has a 15% target (currently 11.9%), covering Long Lease Property (Aberdeen), Ground Rents (Alpha Real Capital), and Affordable Housing (Man Group). The fund currently holds 1.8% in cash.
The investment strategy review considers themes such as overall risk/return profile, cashflow requirements, diversification of growth drivers, inflation protection, and ESG considerations. The Investment Strategy Review - Discussion Paper
provides further details on these aspects. See Appendix 1: Investment Strategy Review - Discussion Paper
Regarding governance, the Pensions Bill Update
report highlights strengthened requirements for pooling arrangements, emphasizing a clear separation between strategic decision-making by administering authorities and operational investment decisions by pools. Administering authorities retain fiduciary responsibility for setting funding strategy, contribution rates, and high-level investment objectives, while using the pool as the primary vehicle for implementation. Robust oversight of the pool's performance, costs, and risk management is expected. The London Collective Investment Vehicle Investment Manager Agreement (LCIV IMA)
report outlines that the core IMA defines roles, responsibilities, fee arrangements, and the delegation of investment decisions to the LCIV. Pensions officers and Section 151 officers across London have jointly appointed the legal firm Brabners to represent the interests of individual London Borough pension funds. See Item 4 Pensions Bill Update Cover and See Item 5 LCIV IMA
Performance benchmarks and targets for the pooled assets are detailed in the Fund and Manager Benchmarks
appendix of the Pension Fund Quarterly Update Q4 2025
report. For instance, the LCIV Global Equity Quality benchmark is the MSCI AC World Index, while the LCIV Absolute Return target is 3-month Sterling SONIA +4% p.a. The performance of Hammersmith and Fulham's portion is tracked through the Isio Quarterly Performance Report
and the Pension Fund Quarterly Update Q4 2025
report. See Item 6 Appendix 2a Isio Quarterly Performance Report for Quarter Ended 31 Dec 25 public and See Item 6 - Quarterly Update Cover
Potential risks associated with pooling, as identified in the Pensions Bill Update
report, include alignment risk, accountability challenges, transition risk during asset transfers, and balancing local democratic input with statutory requirements. Mitigation strategies involve robust oversight of the pool's performance, costs, and risk management, as well as clear delegation of investment decisions to the LCIV. See Item 4 Pensions Bill Update Cover and See Item 3 Appendix 1 Investment Strategy Review - Discussion Paper
ESG principles are a key strategic theme, with the Investment Strategy Review
paper noting progress in incorporating ESG and impact considerations. Specific ESG metrics, such as MSCI ESG Scores and Sustainalytics ESG Risk Scores, are used by managers like Allspring, which integrates EU Climate Transition Benchmark pathways. The fund also incorporates climate considerations within strategic asset allocation, manager monitoring, and stewardship oversight. Enhanced transparency requirements, including reporting on costs, performance, and responsible investment, are expected. See Item 3 Appendix 1 Investment Strategy Review - Discussion Paper and See Allspring – ESG Metrics (1)
The full integration of Hammersmith and Fulham Pension Fund's assets into the LCIV's management is scheduled for April 1, 2026. The LCIV IMA
report confirms that the agreement allows for the fund's assets to be considered under pool management from this date. Key provisions, including LGPS asset pooling, are due to take effect from April 1, 2026, as noted in the Pensions Bill Update
report. See Item 5 LCIV IMA and See Item 4 Pensions Bill Update Cover
