LPPI’s in-house equity portfolio is top quartile hit

Local Pensions Partnership Investments’ (LPPI) internally managed global equity large cap portfolio has achieved seven year total returns of 212.1%, or annualised returns of 17.6%.

This places the large cap portfolio in the top quartile of global portfolio manager peers over the period since inception, outperforming the MSCI World Index, which delivered a total return of 146% over the same period, or annualised returns of 13.7%.

LPPI’s internally-managed global equity small and mid-cap portfolio, launched in 2018, has also delivered strong three year performance, with a 70.8% total return over the period, or annualised returns of 19.4%.

The MSCI World SMID Index over the same period achieved total returns of 31.8% over the same period, or annualised returns of 9.6%, placing it in the top quartile of global portfolio manager peers over the period since inception.

Both portfolios have a common philosophy of investing in businesses with long-term sustainable competitive advantages, supported by opportunities for growth and high quality management teams.

The internal portfolio management offers a low fee environment, but total cost savings to client funds from internalising the two portfolios is estimated at in excess of £40 million since inception.

“The strong performance of the internally-managed equity portfolios demonstrates that, with a long-term philosophy centred around being selective owners of durable business models, we are able to deliver superior performance not only relative to the passive benchmark but also versus the commercial asset management peer group,” said Richard Savage, LPPI’s head of global equities.

LPPI believes that internal management of assets is a key element of success. The business currently manages more than half of the LPPI Global Equities Fund in-house and has plans to expand the in-house investment team.