BNY Mellon in pensions equity fund deal

BNY Mellon has been appointed to provide fund accounting, transfer agency, custody, and trust and depositary services to the Local Pensions Partnership’s (LPP) £5 billion global equity fund.

This follows reforms to pool the UK’s local government pension fund assets.

The fund, the first launched by LPP, comprises the pooled equity assets of the Lancashire County Pension Fund (LCPF) and London Pensions Fund Authority (LPFA), which are the primary clients and shareholders of LPP.

It was launched under the LPP’s Authorised Contractual Scheme (ACS) with future funds planned for additional asset classes.

“We launched the LPP as we believed funds must manage all services together to enable them to benefit from superior governance and to achieve lower costs and above average returns,” said Bruce Carnaby, head of investment operations at LPP.

“BNY Mellon’s depositary oversight and performance reporting capabilities, and its robust approach to managing the transition of assets to the global equity fund, made them our preferred custodian when launching our first tax-transparent pooling vehicle.”

The move follows BNY Mellon’s appointment last month as trustee and paying agent on the Aberdeen City Council’s £370 million bond.

“Over the next year we expect to see more UK-based public sector pension funds collaborating on investment strategies as they seek to control their costs and take advantage of opportunities from the new ACS legislation,” said Paul Traynor, international head of pensions and insurance segments at BNY Mellon.

“In supporting this fund structure, BNY Mellon is providing a range of solutions that can help pension schemes maintain their beneficial tax status and transition their assets into efficient pooling vehicles.”