👀 Relevant to all LGPS and Mansion House Accord signatories. Launching in July – watch this space!
How Can LGPS Fund Managers Develop Local Impact Investment Strategies?
LGPS fund managers can develop local impact investment strategies by understanding what “local” means and aligning investments with fiduciary duties. The Good Economy’s soon-to-be-published white paper, Scaling-Up Local Investing for Positive Impact: A Roadmap for LGPS, new roadmap will offer clarity and guidance, outlining how various asset classes like affordable housing and SME Finance can deliver positive local economic, social, and environmental outcomes while achieving financial returns. This initiative aims to strengthen domestic economies and build trust through impactful local investments.
Aligning Financial Returns with Fiduciary Duties
For LGPS, the conversation around the role of pension funds in investing for local impact is now moving to business planning and investment strategy development. The Government’s “Fit for the Future” Pension Investment Review Final Report has been widely reported. While we were pleased to see the existing track record of LGPS local and regional investment highlighted as a success story and our place-based impact (PBII) reporting framework mentioned, it’s clear there is still uncertainty about what local investing means and how to develop investment strategies that can deliver positive regional and local development impact as well as financial returns that meet fiduciary duties.
At The Good Economy, we believe greater clarity and guidance are needed to help pension funds respond with confidence and purpose. At a time of global uncertainty, we need to build a strong Good Domestic Economy, strengthen trust and partnerships across the public and private sectors and invest in ways that deliver tangible benefits for communities across the United Kingdom.
The Roadmap for Scaling-Up Local Investing
Based on market demand and with support from our PBII Network and a wider group of sponsors from across LGPS Administering Authorities and pools, fund managers and local authorities, we are researching a new White Paper, ‘Scaling-Up Local Investing for Positive Impact: A Roadmap for LGPS’. This follows-on from our 2021 White Paper ‘Scaling-up Institutional Investment for Place-based Impact’, produced in partnership with the Impact Investing Institute and Pensions for Purpose. It is designed to support LGPS Administering Authorities, pools, and signatories to the Mansion House Accord in developing robust, long-term local investment strategies.
Asset Classes for Positive Local Outcomes
Building on our original 2021 PBII model, the paper will set out a common framework for place-based investment and draw on real-world examples from pioneering LGPS funds. It will show how a range of asset classes, including affordable housing, clean energy, infrastructure and SME Finance, can deliver positive local and regional economic, social and environmental outcomes while delivering financial returns consistent with pension providers’ fiduciary duties.
