Local government pension schemes

We understand pensions, and we understand what local government pension schemes need to deliver for their members.

The opportunity

We are one of the most experienced managers of pension assets in Europe. We are able to bring this wealth of experience to bear on the complexities of managing these large schemes for diverse memberships.

Over 25 years managing institutional assets, we have developed a rigorous, risk-aware approach to liquidity management and credit quality maintenance. Our background in insurance has fostered an inherently prudent investment approach that is well-suited to UK pension funds, and Local Government Pension Schemes (LGPS), specifically.

Our expertise 

Dedicated resource

We have a dedicated local authority client director with substantial experience of local authority pension schemes and their investment and liability management needs. This exceptional level of client service is backed up by a client servicing team with extensive experience across the pensions sector, and decades of experience managing cashflows for pensions schemes.

Diverse offering

We’re focused on meeting the core needs of the UK institutional market.
– Cashflow management
– Global equities
– Climate-aware fixed income
– Investing for sustainability and impact
– Private equity

Sustainability reporting

As our clients’ reporting requirements have expanded, we continue to improve the quality of information we provide to them. We also produce comprehensive reports on engagement, investing for impact, Net Zero alignment and biodiversity that help our clients report back to their stakeholders on the sustainability credentials of their schemes.

Sustainability

Sustainability is not an optional extra. We believe that environmental, social and governance (ESG) factors are integral to investment performance and a potential risk-factor for investors.

Sustainability also presents a long-term thematic opportunity. The move to more sustainable economies will require responsible investors who can identify and support ESG leaders, drive the transition and help clients to protect and grow their investment portfolios.

We have devoted substantial resources over time to build a valuable understanding of the risks and opportunities presented by ESG factors. Our proprietary analytical approach allows us to put sustainability at the heart of institutional portfolios and seek investment resilience over the longer term.

Our range of strategies

We offer experience and expertise in listed impact, climate-aware fixed income, global equities and private equities.

Listed impact equity

People & Planet Equity is an all-cap, balanced global equity strategy that is well-diversified across sectors, regions and market capitalisation. It aims to be resilient across the cycle by holding a broad set of companies, ranging from cash-generative defensive moats to smaller, faster growing businesses with disruptive business models.

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Carbon transition buy and maintain

Our Buy and Maintain Credit strategies actively seek to enhance the returns from the investment grade credit market by managing portfolios to reduce costs from turnover and transactions. It has a dual objective of generating an income and capital return over the long term, while keeping its weighted average carbon intensity (WACI) lower than our carbon emissions benchmark.

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Green short duration bonds

Green and social impact investing involves purchasing bonds where the proceeds are earmarked for projects that support a low-carbon economy or the basic needs of underserved populations and communities. They help finance a myriad of initiatives, including renewable energy, pollution prevention, access to healthcare, affordable housing and female empowerment.

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Sustainable Equity QI

Our Equity QI process focuses on quality and low volatility to mitigate risk while capturing returns. We use an advanced form of factor investing to seek companies with high-quality and sustainable earnings, with an emphasis on those with low share-price volatility.

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Investment risks

The value of investments may fall as well as rise and you may not get back the full amount invested.

Fund-specific risk factors

Green bonds

  • Counterparty Risk
  • Geopolitical Risk
  • Liquidity Risk
  • Currency Risk

People & Planet Equity

  • Counterparty Risk
  • Emerging Market Risks
  • Currency Risk

Carbon Transition Buy & Maintain

  • Counterparty Risk
  • Derivatives
  • Interest Rate Risk
  • Liquidity Risk
  • Credit Risk

Sustainable Equity QI

  • Counterparty Risk
  • Geopolitical Risk
  • Operational Risk
  • Stock Lending

Risk linked to Method and Model

Important information

Marketing communication. For professional investors only.

This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.

Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.

Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, (the Sub-Fund’s) performance may at times be better or worse than the performance of relatable funds that do not apply such standards.

This is not an exhaustive list of risks.  For a complete description and definition of risks, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.