LPP sees in-house global equity portfolio outperform

October, 2019 Print

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Local Pensions Partnership’s internally managed global equity portfolio has outperformed its benchmark, by delivering a 136% cumulative total return, versus the MSCI World Index performance of 83.4%, on a five-year track record. The portfolio’s performance has outperformed its target performance benchmark by an annualised 5.8%. This places the LPP internal portfolio in the top quintile of all Global Equity Funds in the eVestment database.

The LPPI Internal Global Equities Portfolio is managed internally by LPP’s investment arm – LPP Investments (LPPI) – and has reached an impressive milestone, said Richard Savage, portfolio manager and head of public markets at LPPI. He believes that the significant outperformance of the fund “demonstrates that with a sound investment philosophy, executed consistently, an active management approach can deliver meaningful excess returns over a passive index.”

The portfolio is a high conviction, low turnover, long-term focused portfolio of circa 30 global equities, listed on developed market exchanges. It seeks to invest in a selective number of high-quality global companies that are underpinned by: sustainable sources of comparative advantage, attractive levels of organic growth potential, resilience to economic cycles, strong environmental, social and governance (ESG) credentials, and led by diligent management teams.

The strategy seeks to buy and hold such businesses at valuations that are not reflective of their long-term compounding earnings growth potential. Its assets under management (AUM) currently stand at approximately £3 billion and account for approximately 40% of the total assets of the LPPI Global Equity Fund Authorised Contractual Scheme (ACS) with AUM currently at approximately £7.5 billion.

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