Lewisham Pension Fund is set to pool its investments with the London Collective Investment Vehicle (LCIV) as part of a wider move to consolidate assets across London boroughs. The decision, discussed at the Pensions Investment Committee meeting on Tuesday, March 17, 2026, marks a significant step in the fund's transition to a pooled investment structure, mandated by the government's 'Fit for the Future' reforms for the Local Government Pension Scheme (LGPS).
The committee approved the entering into of an Investment Management Agreement (IMA) with the LCIV. This agreement formalises the transfer of investment management responsibilities to the LCIV, which will take effect from April 2026. While the LCIV will assume primary responsibility for managing and monitoring the fund's assets, the Pensions Investment Committee will retain strategic oversight and fiduciary responsibilities.
Councillor Sian Eiles, Chair of the Pensions Investment Committee, highlighted the importance of this transition, stating that the IMA is absolutely critical
for the LCIV to deliver on the fund's investment strategy. The move to pooling is a requirement of the 'Fit for the Future' reforms, aiming to achieve greater efficiency and scale. This pooling arrangement is expected to deliver cost savings and efficiency gains through increased scale, a core objective of the government's regulations which require all LGPS funds to pool investments by 31 March 2026.
Under the new arrangement, the LCIV will manage a diversified portfolio of securities within each major market, either through direct investment or pooled vehicles. The Investment Strategy Statement (ISS) for the Lewisham Pension Fund, effective from April 2026, outlines that the LCIV will maintain the same parameters that legacy fund managers currently use for the Fund's allocations. The ISS also details a target allocation of 1-3% of total assets for local investment, to be managed by LCIV.
The LCIV is also expected to play a key role in developing sustainable investment products that align with the Fund's decarbonisation strategy. Member surveys indicate a strong emphasis on responsible investment, with 47% of members believing it's very important. The LCIV will incorporate ESG considerations across all mandates and provide transparent reporting, with the Fund expecting the LCIV to exercise robust stewardship of its assets and proactively monitor its integration of ESG analysis, voting, and engagement activities.
To mitigate potential risks associated with pooling, such as Concentration Risk
where the performance of a single asset class, investment, or manager has a disproportionate influence on the Fund's performance, Lewisham Pension Fund aims to establish a well-diversified strategic asset allocation. The Investment Strategy Statement notes that this risk will be higher from April 1st due to reliance on a single investment manager, LCIV. The Pensions Investment Committee (PIC) will regularly review the investment strategy and conduct fund manager reviews. The PIC also monitors and manages risks through regular scrutiny of its providers and audits, or by delegating such monitoring to LCIV. The PIC retains the power to replace a service provider if serious concerns persist.
The performance of the LCIV will be evaluated against benchmarks and performance targets set out in the IMA. The PIC will regularly assess the LCIV's performance and engage constructively if underperformance continues. The governance structure of the LCIV ensures that all mandates operate under its oversight and governance, with the LCIV assuming primary responsibility for investment advice and asset management.
As part of the 'Fit for the Future' requirement, all London boroughs must transition their investment arrangements into the LCIV. While the broader implications for other LGPS funds are not detailed, the universal requirement to pool by 31 March 2026 is a key driver.
Further details on the Investment Strategy Statement can be found in the Lewisham ISS 2026 clean copy.
