Leveraging a long-term lens

Published: August 7, 2025

As the government’s pooling deadline looms and markets remain volatile, speakers at DG Publishing’s LGPS Pooling Symposium urged LGPS funds to take a steady, long-term view

Pooling has long been a prominent topic of discussion within the LGPS community. It has remained a key focus since the 2015 Summer Budget, when the UK government announced plans to work with local administering authorities to reform the management of LGPS investments.

The topic has gained renewed momentum following a consultation published in November, which set out plans to accelerate asset pooling by March 2026 in support of the chancellor’s wider ambitions for UK investment and economic growth.

Since the consultation was published, many across the industry have raised both challenges and opportunities in response to the government’s proposals. These include the transfer of LGPS assets to pools and the requirement for all pools to become FCA-regulated investment management companies. Administering authorities would also be expected to delegate implementation of their investment strategy to the pools, and to take their principal investment advice from them.

Therefore, DG Publishing’s LGPS Pooling Symposium, held at The Belfry Hotel & Resort in Warwickshire on 6th-7th May, offered the sector a valuable opportunity to step back from the pace of London. It provided delegates with a space to reflect on the evolution of LGPS pooling, assess progress to date and consider the road ahead.

Approaching pooling

With the government’s proposals raising complex questions, panellists offered practical guidance on how funds and pools can begin to navigate the finer details of pooling.

One panellist shared that, in order to better understand the logistics of pooling, they engaged directly with civil servants and sent questionnaires to various pools. This process sparked in-depth discussions with two of the pools or civil servants that enabled a deeper understanding of the process.

This spirit of collaboration was echoed throughout the event, with another panellist emphasising that while taking on new funds is a complex process, it becomes more manageable when LGPS funds recognise they are not in competition and are willing to work together.

If funds do take on new partners, it’s important to approach the relationship as a collaboration rather than a client arrangement, one panellist noted. Achieving this relies on open and transparent communication from the outset, they said.

Another panellist agreed that strong communication is important, adding that it is needed to actively address any underlying mistrust. To support effective, round-the-clock access to information, they recommended holding regular meetings with funds and developing a dedicated website containing key resources, such as governing documents.

Establishing trust is especially critical as pools are set to become the primary source of investment advice under the government’s proposals. This marks a significant shift in the dynamic between pools and administering authorities, requiring pools to adopt new roles and ways of working. For pooling to be effective in this new model, funds must have confidence in how pools operate, make decisions, and communicate, one panellist noted.

This process will vary across pools. Some will have a well-defined starting point and clear objectives, while others may need to take time to determine how best to deliver advice and engage effectively with their partner funds.

However, funds cannot simply rely on the pool’s confidence alone. A key takeaway was that the greater the level of delegation by funds, the more crucial it becomes to scrutinise the pools. If funds have concerns about a pool’s capabilities, they should conduct a thorough health check, focusing in particular on performance.

While there was broad agreement that LGPS funds should take a considered, long-term approach to pooling – including taking the time to hold meaningful conversations and gather the necessary detail – many expressed concerns that this may be difficult to achieve within the constraints of the March 2026 deadline.

Beyond limiting the time available to gather details on pooling, the deadline also presents the challenge of securing agreement among all funds within a pool, one panellist observed. This complexity, they suggested, is likely why the government has adopted a more prescriptive approach to guiding the pooling process.

There was a general acknowledgement of the government’s objectives behind these reforms, alongside an understanding that pooling offers opportunities to reduce costs and drive innovation. However, a recurring theme was that many believe the government’s approach could be improved.

In addition, numerous panellists stressed that member outcomes must remain the central focus, and that funds should only accept new assets into pooling arrangements if doing so clearly enhances those outcomes.

Switching investment strategies

Alongside pooling, the government’s consultation outlined plans requiring administering authorities to develop a clear strategy for their local investment approach. This strategy will specify target allocation ranges aligned with local growth priorities and include detailed local investment reporting requirements.

Many agreed that switching allocations to comply with the new mandate will be costly, and that forcing a rapid transition could significantly increase expenses – an issue the government has itself acknowledged.

Therefore, one panellist advised that, as fiduciaries, it’s important to hold onto certain legacy assets and allow them to remain on the balance sheet, rather than rushing to exit strategies and switch investments solely to meet local investment requirements.

This theme of waiting and avoiding rushed decisions was consistent throughout, with panellists emphasising the importance of a multi-year plan, particularly since the government has not asked for an immediate transition.

This is especially important because policies can change all the time, but the foundation of investment remains centred on achieving long-term outcomes.

While the cost of transitioning was a major concern for many panellists, one pointed out that with a well-designed and carefully executed multi-year plan, these costs can be spread over time, making the overall impact more manageable.

A patient approach

Over the course of the two days, a recurring theme was the importance of patience. This mindset applies not only in meeting the government’s pooling and local investment requirements but also in shaping funds’ wider investment strategies.

Warren Buffett’s famous observation that the stock market is a device for transferring money from the impatient to the patient feels especially relevant today, as market volatility is prompting some investors to step back.

Many panellists agreed that, given current market conditions, it is essential to maintain a long-term perspective and exercise patience to resist the urge to react impulsively, instead staying the course through turbulent times.

The market’s rapid fluctuations mean risks and opportunities present now may quickly become outdated, underscoring the importance of looking beyond the immediate horizon.

In addition, attendees were urged to pay attention to longer-term interest rate forecasts. This outlook, it was suggested, can help manage the impact of inflation – especially where there’s an assumption that rates wouldn’t stay low forever.

Over two days of lively discussion, the LGPS Pooling Symposium explored a broad spectrum of pooling topics: from where it stands today, to what the future may hold. Beyond pooling, the agenda also featured sessions on strategic asset allocation and opportunities across various asset classes, along with a quiz that brought out everyone’s competitive side.

The event was packed with thought-provoking insights, and spirited debate – prompted in part by the experts on the Devil’s Advocate committee. However, given the nature of the debate, there’s possibly no surprise that maintaining a long-term mindset emerged as a core theme.

Further reading
For more information on the event, visit the LGPS Pooling Symposium website.
Iain Campbell from Hymans Robertson on LGPS reform

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