Lambeth Pension Fund has underperformed its benchmark, returning -1.8% against a target of 0.2% for the quarter ending March 31, 2026. The fund's total assets under management stood at approximately £1,933.6 million as of that date.

One Year Performance to 31 March 2026
Bar chart showing the one-year performance of the Lambeth Pension Fund across various asset classes, comparing Sterling Return and Local Currency Return as of 31 March 2026.

The underperformance was primarily attributed to the global equity managers, whose active positions were negatively impacted by volatile market conditions in the first quarter of 2026, exacerbated by conflicts in the Middle East. The fund's responsible investment policies also played a role, limiting exposure to large oil companies, which affected short-term performance but is considered beneficial for long-term carbon footprint reduction.

The fund's overall asset allocation showed an overweight position in global equities and cash, with an underweight in property and private equity. A significant cash balance was noted, stemming from the redemption of an investment in the Invesco European Property Fund. The deployment of these funds is tied to the implementation of the Investment Management Agreement with London CIV, although the specific investment destinations have not yet been decided. The committee expects an update on timelines for investment at the next meeting.

The underweight position in property was a direct result of the redemption from the Invesco European Property Fund. The underweight in private equity is described as a legacy position where funds were held for potential private debt capital calls, which did not materialise. However, new commitments were made in January and February 2026 to UK private equity/venture capital to rebuild the allocation towards the 7.5% target, with due diligence and documentation completed in Q2 2026.

In response to the underperformance, the committee has requested a comprehensive list of all companies the fund is invested in and details of how holdings have voted. The fund is also undergoing a portfolio rebalancing as part of the implementation of the Investment Management Agreement with London CIV. The fund's private equity allocation has been underweight for some time due to maturing funds, with new commitments made in April 2025 expected to improve performance as capital is called and investments mature. The committee also discussed the potential impact of an AI bubble and the fund's exposure to conflict zones.

For context, the London CIV reported approximately £20.2 billion of assets under direct management.

Three Year Performance to 31 March 2026
Bar chart showing the three-year performance of the Lambeth Pension Fund across various asset classes, comparing Sterling Return and Local Currency Return.

Further details on the meeting's agenda and reports can be found in the Agenda frontsheet Wednesday 29-Jul-2026 18.30 Pensions Committee and the Public reports pack Wednesday 29-Jul-2026 18.30 Pensions Committee.