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Summary
The Islington Council Pensions Committee met on 30 June 2025 to discuss pension fund performance, investment strategies, and decarbonisation efforts. The committee was also scheduled to discuss the implications of the government's consultation on the future of local government pension schemes.
LGPS Consultation Outcome: Fit For The Future
The committee was scheduled to discuss the implications of the government's Fit For The Future
consultation, and the final report on the Pensions Investment Review 1 for the London Borough of Islington Pension fund.
The consultation outcome included proposals such as:
- Delegation of investment strategy implementation to LGPS pools.
- Principal investment advice to be taken from or through the pool.
- Transfer of all assets to pools by 31 March 2026.
- All pools to be FCA regulated with due diligence capability for local and regional investments.
The report also noted a reduction in the number of pools from eight to six, and that the government expects the 21 underlying Administering Authorities in the two pools to be disbanded (Access and Brunel) to look for another pool.
The report stated that Administering authorities will set out local investment allocation targets as part of the Investment Strategy Statement (ISS).
The report also detailed a number of governance proposals based on recommendations submitted by the LGPS Scheme Advisory Board (SAB), including the requirement for administering authorities to appoint a senior LGPS officer, participate in triennial independent governance reviews, and publish governance, administration and training strategies.
Pension Fund Performance
The committee was scheduled to review the pension fund's performance from 1 January to 31 March 2025. The report included fund manager performance, with commentary from Apex, the council's independent investment advisers.
The report included a table of fund manager performance:
| Fund Managers | Asset Allocation | Asset Value £m | Mandate | *Mercer ESG Rating | Latest Quarter Performance (Jan-Mar'25) Gross of fees | 12 Months to Mar' 2025 Performance Gross of fees | ||
|---|---|---|---|---|---|---|---|---|
| Portfolio | Benchmark | Portfolio | Benchmark | |||||
| LCIV Sustainable EQ- RBC | 9.7% | 195.6 | Global equities | 1 | -6.6% | -4.7% | 1.4% | 4.8% |
| LCIV -Newton | 15.5% | 311.9 | Global equities | 2 | -4.3% | -4.1% | 4.5% | 5.3% |
| Legal & General-Paris Aligned | 23.4% | 463.4 | Global equities | 1 | -5.6% | -5.6% | 2.4% | 3.0% |
| Amundi | 4.9% | 99.0 | Emerging equities | 1.1% | -0.1% | n/a | n/a | |
| Quinbrook | 4.8% | 96.5 | Renewable Infrastructure | -2.1% | 2.9% | 7.1% | 12.0% | |
| Pantheon | 6.0% | 120.9 | Infrastructure | 1 | 0.8% | 2.4% | 10.1% | 10.0% |
| Aviva (1) | 9.1% | 183.7 | UK property | 2 | 0.9% | -0.0% 2.0% | 2.9% | -4.5% 8.5% |
| Columbia Threadneedle Investments (TPEN) | 6.4% | 129.3 | UK commercial property | 3 | 1.9% | 1.5% | 6.7% | 6.4% |
| Franklin Templeton | 1.5% | 30.4 | Global property | N | -3.9% | 2.4% | -22.7% | 10.0% |
| Hearthstone | 0.8% | 16.5 | UK residential property | N | 24.8% | 2.0% | 15.6% | 8.5% |
| Standard Life | 3.7% | 75.1 | Corporate bonds | 2 | 0.9% | 0.7% | 2.8% | 2.4% |
| M&G Sustainable Alpha Opportunities | 4.6% | 93.3 | Multi Asset Credit | 2 | 1.5% | 1.9% | 7.6% | 8.4% |
| Schroders | 1.1% | 23.0 | Diversified Growth Fund | 2 | -0.3% | 1.9% | 4.3% | 8.2% |
| Churchill Senior loan Fund IV | 2.9% | 58.4 | Private Debt | 2 | -0.7% | 1.2% | 8.1% | 5.0% |
| Permira Credit Solution | 1.7% | 33.5 | Private Debt | 3 | 2.1% | 1.5% | 9.6% | 6.0% |
| Crescent Capital | 2.4% | 48.3 | Private Debt | N | -2.1% | 2.4% | 7.3% | 10.0% |
| Cash/legacy PE | 1.5% | 31.8 | cash | n/a | n/a | n/a | n/a | |
| Market value of total fund | 100% | £2,011m |
The report also detailed the combined fund performance and benchmark for the last quarter:
| Latest Quarter Performance Gross of fees | 12 Months to Mar'25 Performance Gross of fees | ||||
|---|---|---|---|---|---|
| Combined | Portfolio | Benchmark | Portfolio | Benchmark | |
| Fund | % | % | % | % | |
| Performance | -1.7 | -0.6 | 5.1 | 5.6 |
Investment Strategy Review Update
The committee was scheduled to receive an update on the implementation of the investment strategy review, including progress on onboarding three impact managers, and a presentation from Mercer on the review of equities allocation and options for discussion.
The report noted that members had previously agreed to delegate authority to the Corporate Director of Resources to onboard and agree terms and conditions for 3 prospective impact managers and invest £15m each totalling £45m.
The report also noted that members had agreed to invest around £50m into the LCIV Private Credit mandate and to agree to commit to 2% of the whole Fund to LCIV natural capital proposition
The report also detailed a plan to transition its existing fund to the exclusion version also a sub fund on LCIV platform, at an estimated cost of around £44k.
Decarbonisation Policy Monitoring
The committee was scheduled to discuss the fund's progress in reducing its exposure to carbon-intensive companies and absolute emissions since 2016. The report included a carbon footprint analysis of the fund's public equities and credit holdings, covering 62% of the total fund.
The report noted that Mercer had undertaken a carbon foot printing measure of the equities and credit holdings and presented the results in a briefing as well as discussing new targets to adopt to continue decarbonisation to achieving the net zero target.
The report also detailed existing targets:
- Net zero emission target in 2050 including aligning with the 1.5-degree Celsius scenario. Investing at least 20% of the fund in sustainability themed investments by the end of April 2026.
- Reduce carbon intensity of all listed portfolios i.e., equities and credit by 15% by 2026 and 26% by 2030 against a baseline of 2021
London CIV Update
The committee was scheduled to receive an update on the progress made at the London CIV 2 in launching funds, running portfolios, and reviewing governance and investment structure. The update included information from the May 2025 newsletter, including updates on fund performance, monitoring, and governance.
The report noted that the LCIV annual conference will be held on 3 July this year.
Pension Fund Forward Work Programme
The committee was scheduled to review and amend the Pensions Committee Forward Plan, which outlines agenda items for forthcoming meetings and training topics for committee members. The forward plan included standing items for each meeting on performance reports and CIV update reports.
The forward plan included a list of reports scheduled for discussion at future meetings:
- 3rd September 2025: 4 year Business Plan review, Annual Report, Annual Admin performance report and risk register, Training review
- 22nd September 2025: Annual General meeting?
- 8th December 2025: Draft FSS for consultation, Draft ISS for review, Strategic Asset allocation review
- 16th March 2026: Actuarial valuation report, Final FSS post Consultation, Transition plan to LCIV, Final ISS
- 8th June 2026: Carbon monitoring, Governance report
The report also included a list of past training for members before committee meetings:
| Date | Training |
|---|---|
| November 2018 | Actuarial update |
| June 2019-4pm | Actuarial review |
| February 2021 | Net zero carbon transition training |
| September 2022- joint | Actuarial Valuation training |
| pension and board training | |
| November 2023 | Impact Investment Training |
| July 2024 | Shareholder voting guidance training |
| TPR General single code training |
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The Pensions Investment Review was launched to tackle fragmentation, boost investment, increase saver returns and address waste in the pensions system. ↩
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The London Collective Investment Vehicle (CIV) is a collaboration between London local authorities to pool their pension fund assets and reduce investment costs. ↩
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