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Item 7 - Fixed Income: Addressing the Challenge (P10/16)

Summary

The Local Government Pension Schemes, in common with many pension funds across the globe, require structurally higher cashflows than in the past. This secular change will require a structural re-weighting towards fixed income products, at a time when traditional fixed income products can no longer deliver the returns and outcomes that the pension funds require. Collaboration through the CIV will increase the chance of meeting the cashflow requirements, as the scale of assets will enable the CIV to seek bespoke structured solutions which would likely not be economic for the boroughs on a stand-alone basis.

 

Recommendations

The committee is recommended to:
i. Note the work and findings of the Investment Advisory Committee (IAC) and the CIV officers; and
ii. Approve further work by the IAC and CIV officers to explore more fully the concept of a bespoke CIV product (or range of products) as one possible solution in the quest to secure the required cashflows.