NORTHERN TRUST London's boroughs and the City of London, collaborating through London Councils, have worked with Northern Trust (Nasdaq: NTRS) to ensure that London's local government pensions funds are the first of 101 local government schemes in the United Kingdom to establish a tax-transparent pooled fund.
The collective investment vehicle, an Authorised Contractual Scheme structured as a co-ownership arrangement (ACS) and the first of its kind for the UK pensions industry, will enable London boroughs to achieve economies of scale, provide a platform for significant cost savings, and enable access to opportunities for investment in alternative asset classes that may not have previously been easily achievable for individual funds.
Mayor Jules Pipe, Chair of London Councils, said: "We are excited to be at the forefront of evolution in the local government pension scheme (LGPS) landscape. The collective investment vehicle demonstrates London local government's commitment to efficiency and value for money. Appointing Northern Trust to support us in this venture is a key milestone and their proven expertise in asset pooling and significant experience across the sector will be very valuable."
Penelope Biggs, head of the Institutional Investor Group for Europe, Middle East and Africa at Northern Trust, said: "We are extremely proud to support London Councils as they embark on this exciting journey, raising the bar for innovation in LGPS. As market leaders in the LGPS, providing services to over a third of the UK market, we recognise the commercial pressure our clients are facing and are leading the way to help them become more efficient and cost effective. We have extensive experience providing asset pooling solutions and offered London Councils insights and guidance on how to unlock the financial and administrative potential of the ACS."
An ACS is a Financial Conduct Authority regulated tax-transparent fund domiciled in the UK. Enacted into UK regulation in June 2013, the ACS aligns the UK investment funds regime with other European jurisdictions offering tax-transparent pooling vehicles. The ACS provides tax efficiency by allowing investors to preserve their own withholding tax status in relation to the investments made by the fund. This can offer withholding tax benefits for tax treaty advantaged investors when comparing equivalent investments through traditional funds. In addition to supporting this innovative fund structure for London Councils, Northern Trust will also provide global custody, fund administration, depositary services, transfer agency and financial reporting services for the ACS.
Northern Trust offers an extensive range of services to more than 150 UK pension schemes, including over 37 percent of the total LGPS market and 30 percent of the top 100 UK funds. Northern Trust is a pioneer in cross-border pooling and was the first custodian to fully support tax-transparent funds created to pool the assets of institutional investors with multiple tax rates, investing in multiple jurisdictions.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of asset servicing, fund administration, asset management, fiduciary, and banking solutions for corporations, institutions, families, and individuals worldwide. Chicago-based Northern Trust has offices in 19 states, Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2014, Northern Trust had assets under custody of US$6 trillion, and assets under investment management of US$934.1 billion. For 125 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com and follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures
About London Councils
London Councils represents London boroughs and the City of London. It is a cross-party organisation that works on behalf of all of its member authorities regardless of political persuasion.
London Councils makes the case to government, the Mayor and others to get the best deal for Londoners and to ensure that our member authorities have the resources, freedoms and powers to do the best possible job for their residents and local businesses. It also runs a number of direct services for member authorities including the Freedom Pass, Taxicard and Health Emergency Badge as well as an independent parking appeals service and a pan-London grants programme for voluntary organisations.
www.londoncouncils.gov.uk.
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