West Yorkshire Pension Fund – Interview
you are: it is those things that we need to consider first as much as any specific implementation decisions. On the invest- ments themselves, we are
diversified:
public, private, alternatives. We are pretty much everywhere.
Have you set yourself any particular challenges? Kalisperas: We are a close to £20bn pen- sion fund with 20-odd people in the investment team. We would like to see a few more people here and I am making that move myself. I am commuting from London for the first six months then re-locating to Yorkshire. I have, in a small ‘p’ way, a political view that the country could do with having financial centres
of excellence outside
London and the southeast. It would be good to see our investment team, as part of the pool, grow. Recruitment and retention is one of the strategic challenges Euan and I see.
In that sense, do the government’s leveling up and northern powerhouse initiatives help? Miller: The funds in Northern LGPS have probably led the way in the pools to a large extent in these types of investments, espe- cially Greater Manchester, which has a long-established local investment portfo- lio. So, there does not need to be a big change to what we do.
There is an inverse proportionality in many aspects of managing the LGPS: for example, the employers who employ thousands of LGPS members often have specialist pensions resource and have par- ticipated in the scheme for many years, so typically need less help and assistance from their administering fund, but smaller
employers may have joined
recently and only have one or two admin- istrative staff, so you need to hold their hands to a larger extent. Similarly for LGPS investments when it comes to local or regional initiatives, a £1bn-plus external passive mandate would likely consume less management time
than £10m or £20m invested in a specific local project The investments which may be encouraged by the leveling up agenda could be resource intensive.
So such investments need to fit the bill? Miller: Yeah, they have to wash their own face and deliver a commercial return for the fund. We are not grant money. That is a misconception people outside the LGPS sometimes have. We are a commercial investor at the end of the day, and have pensions to pay, which need to be funded by employers and scheme members.
How important is ESG to the fund? Kalisperas: We have an ESG officer who collaborates with Greater Manchester and the Merseyside Pension Fund as part of Northern LGPS. We have signed up for many progressive initiatives.
The E has had a lot of the attention, and rightly so, but, from my own position, I would like to see more balance between the three aspects of the E, the S and the G. The old-fashioned responsible invest- ment pieces – the S and the G – are important. I feel good about the share- holder resolutions we have an opportunity to partake in as part of the pool. As investors, we see a direct positive link between the S and the G. The E some- times feels like a more existential ques- tion of engagement or even divestment, which makes it more difficult.
What do you aim to achieve in your role? Kalisperas: I want to see layers of curiosity about the investment puzzle. But our bread and butter remains the same: man- age the assets in the context of our trien- nial-evaluation and try and get to the next one in a healthy state. That has to be the duty: give confidence that we can pay the pensions when they are due.
What do you mean by “layers of curiosity”? Kalisperas: The investment universe has gone through a significant shift since 2008 and the pension fund has been suc-
LEANDROS KALISPERAS’ CV
December 2022 – present Chief investment officer West Yorkshire Pension Fund
2018 – 2021 Head of portfolio solutions Abrdn
2017 Monetary policy advisory roles
2010 – 2016 Head of credit Universities Superannuation Scheme
cessful in having a long-term risk appe- tite. There is the small danger of inertia as we come out of a 15-year run. The idea that you don’t take as much infor- mation from the outside because you are doing fine. This can lead to drift in areas. I would like to see some broader curiosity about the changes in the investment uni- verse that could be implemented for the benefit of the fund: those could be the- matic or regime changes, but I see these as evolutions.
What about you, Euan? Miller: Simply, it’s our job to have enough money to pay the right people, the right benefits at the right time at an acceptable level of cost for employers. We have done that for many years. I hope under my watch, we will continue to do so.
EUAN MILLER’S CV
October 2022 – present Managing director West Yorkshire Pension Fund
March 2014 – October 2022 Assistant executive director Greater Manchester Pension Fund
June 2010 – March 2014 Senior actuary and consultant KPMG
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