The UK’s new local investing mandate for the Local Government Pension Scheme (LGPS) is more than a policy shift, it’s a multi-billion-pound opportunity for fund managers. As the LGPS and their pools look to increase local allocations, they are actively searching for asset managers who can be trusted partners in delivering on this new agenda.
However, winning these mandates requires a new approach. LGPS funds are under pressure to show how their investments are making a real difference to local people and places. And they need managers who can prove their social contribution, not just promise it.
Based on our white paper and our experience working with pioneers in this space, The Good Economy has created a 5-point Local Investing Checklist to ensure your fund is “investor-ready”.
The Local Investing Checklist
1. Define Your ‘Local’ Story
This is the new imperative. A generic UK-focused fund is no longer specific enough. LGPS pools need to see that you understand the new dynamic and can align with the specific economic, social and environmental priorities of their regions.
Your local story must demonstrate how your investments in areas like Housing, Real Estate, Regeneration, Infrastructure, SME Finance or Natural Capital directly support a specific region’s strategic goals by, for example, aligning with a Combined Authority’s Local Growth Plan.
Why it Matters
This alignment shows you are a strategic partner, not just a product provider. Our strategic advisory services help fund managers and public authorities design and deliver local investing strategies that are practical, evidence-based and aligned with local investing policy priorities.
2. Adopt a Credible Reporting Framework
To raise capital, you must back up your ‘impact’ story with credibility. Vague, inhouse frameworks or outdated economic models are a red flag for institutional investors. LGPS funds need consistent, comparable data to report to their own stakeholders.
Adopting an industry-recognised methodology, like the PBII Reporting Framework, signals that your reporting stands up to scrutiny. This is exactly the approach used by pioneers like the Greater Manchester Pension Fund (GMPF) to assess their £1.5 billion local portfolio.
Why it Matters
Using a proven, industry-aligned reporting framework improves your risk profile. It shows you are transparent and makes the pension fund’s due diligence and onward reporting significantly easier.
3. Gather the Right Asset-Level Data
A credible framework is useless without credible data. You must have a robust system for gathering fund-level and asset-level data. This is the evidence that moves your pitch from bold claims to clear evidence.
Instead of just anecdotes, you need to provide the hard data for your contribution to the area. This means tracking key performance indicators that directly support the objectives of the region’s Local Growth Plans.
Why it Matters
Credible data builds trust. Our Impact Services team helps clients to plan, manage, measure and report on their contribution to positive social and environmental outcomes by developing impact measurement and management (IMM) frameworks that integrate a focus on real-world outcomes into their processes and decision-making – and enable the collection of data required for the PBII Reporting Framework.
4. Integrate a Risk-Return-Impact Lens
LGPS funds are public money and are subject to a fiduciary duty. Positive local impact is essential, but it doesn’t replace the need for commercial, risk-adjusted returns. The GMPF portfolio, for instance, explicitly operates on the twin aims of achieving both a financial return (RPI+4%) and a positive local impact.
Your strategy must demonstrate how you integrate impact as the ‘third lens’ for decision-making, alongside risk and return, to optimise investments.
Why it Matters
This proves your understanding of the local investing mandate. You are not asking them to sacrifice returns for impact – you are showing them how your strategy delivers both. Our landmark white paper provides the essential roadmap. It sets out a thoughtful framework that bridges rigorous analysis with innovative, localised investment strategies.
5. Prepare Your Investor-Ready Pitch Materials
Finally, you must package your local story and your data into a compelling, clear and credible pitch.
Your pitch materials must clearly communicate your entire impact process – from your place-based strategy and reporting framework to your hard asset-level data. The goal is to provide investor-ready outputs such as dashboards, case studies and investor-ready factsheets that make it easy for a LGPS fund to say ‘yes’. The place-based report we did for Gresham House is an excellent example of how to package the local impact of your portfolio.
Why it Matters
A strong, evidence-backed pitch stands out in a crowded market. It gives investors the confidence in your credibility that they need to make an allocation, secure in the knowledge that you can deliver – and prove – your contribution to inclusive growth in the target area.
Download Checklist
Ready to secure your allocation?
The Good Economy helps fund managers turn bold claims into clear evidence. Our specialised Impact Services, Strategic Advisory and PBII Reporting Framework provide the robust, independent validation you need to meet the LGPS mandate and win investor trust. Partner with us to build a strategy that stands up to scrutiny.
Download our checklist to self-assess your funds readiness for the Local Investing mandate.
