New programme to reduce FX trading costs for UK pension schemes

Russell Investments has announced the launch of an LGPS-specific FX Execution platform. Cambridge and Northamptonshire pension funds are the first to join the platform, for whom Russell identified potential annualised cost savings in the region of £300k* on FX fees. These savings will be primarily achieved through Russell’s competitive trade execution abilities.

Tolu Osekita, who has responsibility for managing the investments of the Northamptonshire and Cambridgeshire Pension Funds said: “The Russell FX trading platform will allow us to make cost savings by being smarter about the way we trade across the two funds. We also supported this program because of the potential it offers for additional cost savings across the LGPS as other schemes join up to the FX platform in the future.” Osekita continued: “Smart solutions that deliver efficiencies in the way our investment strategies are implemented are a critical consideration for LGSS Pensions services and representative of the way we think across all our service offerings. We have enjoyed working with Russell on this initiative, and certainly see the potential that they could bring forward other smart bespoke solutions in the future that could help us achieve our strategic objectives.”

Klaus Paesler, Head of Currency and Overlay Strategy EMEA for Russell Investments, said: “Fees and charges related to FX trading are some of the biggest transaction costs for pension schemes and fund managers. Russell has been executing competitively on behalf of pension funds and asset managers for more than 10 years, with exceptional results. We are very pleased to have had the opportunity to design and launch this LGPS specific programme, intended to support further cost savings and collaboration amongst the LGPS”. Additional benefits include greater transparency in terms of a time stamp and cost of execution for every transaction, and management of counterparty risk.

Russell’s trading capabilities are available to the broader pension fund community as well as asset managers. The LGPS specific program has been launched in response to the increased interest in achieving cost savings through collaboration in this sector.

*Cost savings analysis was based on one year data for each fund (to June 2013).