The £21 billion Greater Manchester Pension Fund (GMPF) has generated a return of 23.8% for the year to March 31, 2017, boosted by returns of over 30% for both UK and overseas equities.
GMPF outperformed its fund-specific benchmark for the period, and its five-year annualised return of 10.9% is also ahead of the benchmark return of 10.2%. GMPF’s strong performance is in line with the Local Government Pension Scheme (LGPS), which is understood to have generated an overall average return of 21.1% over one year and 10.7% over five years. GMPF now has over 350,000 members and 500 employers.
In terms of its funding level, GMPF saw its overall funding level rise to 93% in the latest triennial valuation, up from 91% in the 2013 valuation. This was achieved despite taking on the liabilities for LGPS benefits for the Probation Service from other local authority funds which were generally less well funded than the GMPF. The fund’s main employers saw an average improvement of 5% in their funding positions. Commenting in the annual report, councillor Kieran Quinn, chair of the pension fund management panel, said: “A key feature of GMPF’s activity this year has been working alongside the Greater Manchester Housing Investment Fund to provide financing to developers to build much needed new homes. At the time of writing this report, GMPF has made or is in the later stages of due diligence on deals worth approximately £100 million, leading to the building of over 2,000 new homes.”
Within its £589 million private equity allocation, GMPF made nine new fund commitments of £237 million in total in 2016-17, and it now has a portfolio of 101 active funds diversified by stage of development and geographic location worldwide. The private equity portfolio has achieved an annualised return of 16.6% in the year to March 31, 2017. Since 2011, GPMF has taken a vintage decade approach to private equity performance measurement. Under this approach, the 1980 vintage commitments have returned over 12% a year, the 1990 vintage commitments have returned over 25% a year and the performance of funds invested between 2000 and 2010 is over 9% a year.