London town hall pension fund sells all its UK government debt
LONDON’S biggest council pension fund boosted its investment returns last year after selling its entire holdings of UK government debt, its chair said yesterday.
The London Pension Funds Authority sold about £1bn of gilts in March 2013 last year, making it one of the few town hall funds holding zero UK government debt. But its chair yesterday said the move out of gilts into equity futures and alternative investments had paid off handsomely.
LPFA boss Edmund Truell told City A.M.: “It’s only a year, which is just a blip in a pension fund’s timeframe, but nevertheless it’s been a good first year and we’ve used the money to reduce our risk.”
The fund sold its UK gilt holdings when they yielded just 1.82 per cent, while its tactical equity switch has so far delivered 17 per cent. The move to sell UK debt is at odds with the prevailing trend in council pension plans, which buy gilts to match long term pension liabilities.