Sutton's Pension Fund assets are now entirely managed by the London Collective Investment Vehicle (LCIV), a significant development following the implementation of Fit for the Future regulations. This transition means that 100% of the fund's assets are now under the management of LCIV, a requirement of the new regulations which came into force on June 30, 2026.

The Fit for the Future reforms are designed to enhance governance, facilitate pooling of assets, and encourage local investments within the Local Government Pension Scheme (LGPS). Beyond mandating collective investment vehicles like LCIV, key requirements include the appointment of a senior LGPS officer and an independent person by September 30, 2026. The reforms also necessitate policy updates and significant changes to governance arrangements and training for members.

Bar chart showing the five-year performance of various investment categories, including equities, bonds, property, cash, and commodities, with data presented for Sterling Return and Local Currency Return up to March 31, 2026.
Five Year Performance to 31 March 2026

Katherine Gray, Head of Pensions Investments and Treasury, informed the Pension Board that while the fund's assets are now managed by LCIV, the Pension Committee retains its crucial role in setting the high-level investment strategy. This strategic oversight is estimated to drive between 80% and 90% of investment returns. The committee's role has consequently shifted to scrutinising the effectiveness of LCIV's management, supported by a senior LGPS officer and an independent person to provide robust challenge.

This shift in focus comes as LCIV has been addressing performance concerns. The Pension Committee noted that our active equity managers did really struggle and particularly in the geopolitical tensions, but also have done over the last one to two years. Specific underperformance figures were highlighted, with the LCIV Global Equity Fund underperforming its benchmark by -4.9% over the quarter, the LCIV Sustainable Equity Fund by -2.4%, and the LCIV Multi-Asset Credit Fund by -2.1%.

Bar chart showing the performance of different asset classes, with Listed Equity showing the highest positive return and Private Equity showing a negative return.
Performance of different asset classes

In response to these concerns, LCIV is taking action, including the launch of a new multi-manager equity fund designed to provide long-term risk-adjusted returns. The committee's enhanced scrutiny will involve making high-level strategic decisions on asset allocation, ensuring that LCIV's management aligns with the fund's objectives.

Further details on the Fit for the Future reforms can be found in the Public reports pack for the Pension Board meeting on July 16, 2026.