LGPS Central unveils multi-asset credit strategy

LGPS Central has launched a £680 million multi-asset credit fund, with initial investors including Cheshire Pension Fund and West Midlands Pension Fund.

The two fund managers, selected from over 80 who expressed an initial interest in tendering for the mandate, are BMO Global Asset Management and Western Asset Management Company Limited, with each fund manager receiving half of the total mandate.

The fund will give investors exposure to a broad breadth of strategies, that would not be investable as a standalone asset class.

The fund managers will have the flexibility to move opportunistically between those asset sectors quickly and efficiently, said LGPS Central chief investment officer and investment director for fixed income, Gordon Ross.

“We’re very excited to launch our Multi-Asset Credit Fund on behalf of our Partner Fund investors. Pursuing a MAC strategy will give partner funds exposure to multiple fixed income assets / classes through a single fund, thereby resulting in fewer managers, lower costs and a reduced governance burden,” he said.

Multi-asset credit strategies can also provide yield enhancement compared to traditional fixed income strategies, which can help meet liabilities in a low interest rate environment, he added.