Analysis by Modern Investor has shown that Local Government Pension Schemes had at least £4.2 billion invested in either Standard Life or Aberdeen Asset Management in 2016.
The investments were calculated using our Who Owns What (WOW) database, which contains the holdings of public pension funds in 12 countries, including 95 UK local authorities, as well as a bulk of retirement schemes from Finland, Australia, Chile, Colombia, Czech Republic, France, Iceland, Israel, Peru, Portugal and Sweden. This data is accurate to the end of June 2016.
The merger confirmed in March created an asset management firm with £660 billion under management.
Modern Investor’s Global WoW database, which shows that of local authorities for which there is data, in 2016 £1.4 billion was managed by Aberdeen Asset Management, with the figure at £2.8 billion for Standard Life.
This differential, at nearly 33% invested with Aberdeen and 67% in Standard Life, is almost the same as the agreed merger terms, which give shareholders in Aberdeen and Standard Life 33% and 67% of the new firm respectively.
About 30% of the combined funds under management in the new firm from LGP schemes are in equities, but the headline equities figure conceals a significant difference in the LGPS investments in the two funds. 52% of funds invested with Aberdeen are in equities compared to 19% in Standard Life.
The contrast is sharper when it comes to property investments, which represent 29% of the combined funds. 2.5% of the LGPS investments in Aberdeen are in property, 0.8% of the investment in the combined funds to be merged. With Standard Life those figures are 42.6% and 28.5% respectively.
A further point of interest is Standard Life’s Global Absolute Returns Fund (GARS), which alone covers £1.2 billion of LGPS combined investments and 28% of the combined total invested by local authorities in the two asset management firms.