The Barking and Dagenham Pension Fund is on track to complete its transition of all remaining assets to the London Collective Investment Vehicle (LCIV) pool by March 31, 2026. This consolidation is a requirement of the 'Fit for the Future' legislation, which mandates that Administering Authorities transition all remaining assets to their chosen pool by this deadline. The Pensions Schemes Bill, the mechanism for implementing these proposals, is expected to be enacted around April 1, 2026.
At a recent Pensions Committee meeting, the London CIV Investment Management Agreement (IMA) was approved. This agreement details investment objectives, policies, and fees. The IMA has four schedules: Schedule 1 - Client specific matters, Schedule 2 - Investment objectives, policies and guidelines, Schedule 3 - The Investment manager fees, and Schedule 4 - The Portfolio. The estimated cost in a full year for additional responsibilities and workload due to the transfer of Fund mandates to the London CIV is £194,465. The London CIV contends that they will be taking on additional responsibilities and workload through the transfer of Fund mandates to them, hence the scale of fees set out in Schedule 3. The LCIV, however, anticipates future cost reductions through the streamlining of investment mandates. Initially, there will be limited changes, but rationalisation is inevitable, starting with the publicly quoted asset classes, equities and fixed income. The timeframe for these cost reductions is not explicitly stated, but it is implied that rationalisation will occur over time, particularly for private market asset classes which are expected to take many years to achieve.
Nick Vickers, Interim Head of Pensions, Treasury and Capital, confirmed that the legislation mandates the transition of all remaining assets to the designated pool by the March 2026 deadline. With the disposal of the Absolute Return funds managed through the London CIV, the Fund now only has two mandates managed through the London CIV, covering 20.9% of the Fund's assets. Any assets not currently invested in the Pool will be reviewed at least every three years to determine whether the rationale remains appropriate and whether it continues to demonstrate value for money. The legislation allows funds to be deemed to be pooled if there is an Investment Management Agreement (IMA) in place between the pool and the investment managers who have previously been contracted directly by the Fund. The IMA needs to be approved by each partner fund in the London CIV by 31 March 2026. There are complex issues with regard to the private market asset classes (Commercial Property, Infrastructure and Private Equity), and their rationalisation is likely to take many years to achieve.
The committee also received an update on the LCIV's approach to Responsible Investment (RI), including the development of an RI Matrix. This matrix is a refined solution following further Partner Fund feedback as of December 2025 and will cover both Active and Passive solutions. It is not a fixed position and will evolve as circumstances and needs change. Partner Funds are not limited to any one pillar and could have exposure to different asset classes in different pillars. The Barking and Dagenham Pension Fund has expressed interest in a Human Rights overlay
and has welcomed early engagement with the London CIV on the specific objectives they are seeking to achieve for this overlay. The London CIV's RI Matrix is designed to afford choice of differing levels of RI within different asset classes and to accommodate varying levels of RI across different asset classes and investment styles. Dean Bowden, CEO of London CIV, expressed interest in early collaboration with Barking and Dagenham regarding their specific goals for a Human Rights overlay, aiming for greater uniformity among funds and to prevent unforeseen issues. The London CIV welcomes early engagement on the specific objectives for a Human Rights overlay to support the design from the outset
and to identify and mitigate any unintended consequences in the design of the overlay, drawing on experience gained from similar work undertaken with other Partner Funds.
The London CIV Investment Management Agreement (IMA) is attached as Appendix 1 (private and confidential) [https://lbbd.moderngov.co.uk/documents/s179766/Appendix%201.pdf]. Schedule 2 outlines the investment objectives, policies, and guidelines, but these are not detailed in the provided text as the appendix is private and confidential.
Further details on the pension fund's financial position can be found in the Public reports pack [https://lbbd.moderngov.co.uk/documents/g13786/Public%20reports%20pack%20Thursday%2026-Mar-2026%2019.00%20Pensions%20Committee.pdf?T=10].
