Interview | Anthony Parnell


That is what we have done so far. The fixed income and regional equities will take us up to £10bn by the end of the year.


Why were the first sub-funds launched by the Wales Pension Partnership targeting equities?


They are liquid and quite a high percentage of our eight partner funds’ capital is invested in these assets. It was a quick win, if you like. It was easier to engage with cur- rent managers in this area to review their fees and the transition between the global equity legacy funds and the target funds was the quickest win initially.


As part of that process Russell contacts managers and negotiates fee savings with them prior to appointing them to the platform.


Does WPP have any input on appointing its managers? We don’t decide. It is Russell Investments and Link that make that decision. We engage with Link and Russell throughout the process. We have an operator agreement with Link. It is the party that liaises with the Financial Conduct Authority (FCA) and sends it our prospectuses, because it is the FCA-regulated vehicle.


A big part of the appointment process is looking at responsible investment issues.


A couple of global equity managers were not performing in Wales, so it was a good opportunity to review them all. So that was important as well.


What is your global equity fund strategy? We have not built our own vehicle. We have appointed an operator, Link Fund Solu- tions, for Wales Pension Partnership. They have partnered with Russell Invest- ments. So Link provides the platform and Russell provides the manager due diligence and selection service. We have set up two global equity sub-funds – the Global Growth Fund, which has three managers and Link overseeing it. The sec- ond is the Global Opportunities Fund, where Russell Investments is the manager and there are seven sub-managers.


You have passed a lot of responsibility onto Link. Are you happy with what it has achieved so far? Yes, from the fee savings that we have had from our current managers in the long term we will be making savings. We are pleased with the engage-


ment that Link and Russell have had with the eight funds in Wales and the joint-gov- ernance committee. The chairs of the eight local governance pension schemes in Wales sit on a joint committee and that is supported by an officer working group. Link and Russell report back to the joint governance


committee working group regularly. and the officer


When are you intending to launch your fixed income sub-funds?


There will be four fixed income sub-funds. The joint-governance committee has approved those sub-funds, but we haven’t done any investing yet. We have another joint-governance commit- tee at the end of June, so we will continue that process going forward. We would like to think that we could get those invest- ments done by the end of the calendar year. That is our aim.


Another reason for pooling was to invest more private capital into upgrading roads, bridges and communication networks. Have you any plans for a specific infra- structure fund? We are doing some work at the moment with Russell Investments and bfinance looking at illiquid assets and investing in the private markets.


That is being done concurrently with the other piece of work that Russell is doing for us. We are not as far forward with those as we are with the liquid asset vehicles. We have a received a couple of reports from Russell and bfinance and will be taking subsequent reports to future joint-govern- ance committees.


Is exposure to these types of assets some- thing that your partner funds have requested? We all have some alternative assets in our


It is more of a challenge to pool


investments on the private market side because of the illiquidity, but all eight partner funds are committed to doing some pooling on the illiquid side.


20 | portfolio institutional | May–June 2019 | issue 84


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