How does GMPF invest?

It’s our job to invest the contributions our members and employers pay in, to help fund the pensions that we pay now and those that we will be paying in the future.

What do GMPF invest in?

There are lots of types of investment. You can group investments under different headings known as ‘asset classes’. 

Greater Manchester Pension Fund (GMPF) invests in the following asset classes:

  • public equity
  • bonds
  • cash
  • property
  • alternative assets

What is public equity?

Businesses have several options for raising capital and attracting investors. Equity allows a company to give investors a share of the business. The investor then earns returns as the business grows. Most publicly traded stocks are available and easily traded daily through public market exchanges, such as the London Stock Exchange.

What are bonds?

A bond gives a fixed rate of return. A bond could be thought of as an ‘I owe you’ between the lender and borrower that include the details of the loan and its payments. Bonds are used by companies and governments to finance projects and operations.

What are alternative assets?

An alternative investment is a financial asset that does not fall into one of the conventional investment categories such as stocks, bonds and cash. Types of alternative investment include private equity and real estate. Since July 2018, we have invested in private equity through our Northern LGPS joint venture arrangement, Northern Private Equity Pool LP. You can find more information about this on the Northern LGPS website.

Why does GMPF need to invest?

The returns that we get on our investments help to pay towards the cost of pensions. If we didn’t invest, contributors and employers would have to pay more than twice as much as they do now in order to get the same level of pension benefits. Investing also has the additional benefit of being good for the local and wider economy.

Who does the investing and how is it decided?

We appoint external investment managers to invest the majority of our assets on our behalf. These managers invest according to the guidelines set by our management panel.

We manage some investments internally. This is mainly through a joint venture called GLIL Infrastructure LLP. We also purchase and manage some properties directly through the Greater Manchester Property Venture Fund, and we have a Local Investments Impact Portfolio.

What is a GLIL Infrastructure LLP (GLIL)?

GLIL Infrastructure LLP (GLIL) is a joint venture created in April 2015 by GMPF and Local Pensions Partnership to invest directly into infrastructure assets, predominantly in the UK.

Since then, GLIL has committed over £1.8 billion from five Local Government Pension Scheme (LGPS) funds and is looking to engage collaboratively with other pension schemes.

GLIL has completed nine transactions to date in the energy, transport, utilities and social infrastructure sectors. These nine transactions represent an investment of over £1.1 billion.

One of GLIL’s earliest transactions was the purchase of a 21.7 percent (£150 million) stake in Clyde Windfarm. At the time of investment, Clyde had 152 turbines and a further 54 more powerful turbines under construction. The new turbines became fully operational in September 2017, and at this point, GLIL invested a further £118 million. Clyde now has a total generation capacity of 522MW, making it one of the largest on shore wind farms in Europe.  

More information can be found on the GLIL website.

What is the Greater Manchester Property Venture Fund?

The aim of the portfolio is to gain cost effective, diversified exposure to property development assets located predominantly in the North West of England and with a clear emphasis on Greater Manchester. Also, to add value to the economy of the North West through property development to generate employment, improve long term employment prospects and generally contribute to the overall development of the local economy. The target size for the mandate is three per cent of the main fund value.


What is the Impact Portfolio?

We have an investment mandate for the Impact Portfolio to gain cost effective, diversified exposure to impact investments located predominantly in the North West of England with a focus on Greater Manchester. The impact themes of the portfolio are primarily Jobs and Place. The target size for the mandate is 2% of the main fund value. 

Gresham House and Bridges are two of the external fund managers within this portfolio and the videos below showcase the types of investments undertaken and the outcomes we are trying to achieve.

Bridges fund management


Gresham House specialist asset management


How do GMPF investments perform?

We measure how our investments perform by looking at the return received over a specific period. To decide whether that performance is good or not, we compare it against several benchmarks. 

One of the ways we do this is by regularly comparing our performance to that of other Local Government Pension Scheme (LGPS) funds. Over the long term, our main fund outperformed the average local authority by around 0.5 percent per year and, over the periods of 20, 25 and 30 years, has ranked third of such funds. GMPF is therefore considered one of the top performing LGPS funds in the country.

What is a benchmark?

The value of an investment may rise because the whole market is rising. Therefore, looking at the amount of investment return received in isolation does not tell you how well an investment has performed. To do this, you need to compare the performance of your investment to a benchmark. A benchmark is usually something that indicates the performance of the whole market to which that stock or investment belongs.

Benchmark indexes have been created across all types of asset classes. Examples include FTSE 100, S&P 500 and the Dow Jones Commodity Index.

You can find out more about our investment performance in GMPF’s latest annual report and accounts.

Our approach to responsible investing

Being a responsible investor is really important to us. 

We strive to make decisions and create policies that reflect our commitment to investing in the best interests of all our stakeholders and wider society. 

We have developed an investment strategy to help us achieve this. We review this regularly and publish it in the form of an investment strategy statement. The statement sets out our beliefs and approach to all aspects of how we invest. We also have a responsible investment policy that describes our approach to responsible investing in more detail.

What factors shape GMPF’s approach to investing?

We are a long term investor. Our members are paying contributions now in return for a pension that we might not pay for another thirty or forty years. Therefore, we must make investment decisions with this in mind.

We are committed to reducing the environmental impact that our investments have. We aim for all our investments to have net zero carbon emissions by 2050 at the latest, in line with the Paris agreement on climate change. 

We are also committed to ensuring that, wherever possible, our investments have a positive benefit for our members and wider society.  

So, when thinking about investing, we consider as a minimum:

  • the likely financial returns
  • the risks attached to an investment and how we can manage them
  • the balance between the different types of investment we hold
  • the environmental and social impact that the investment might have
  • whether those running the company we are investing in are doing a good job.

How does GMPF make sure its approach is in line with industry best practice?

We are a member of the Local Authority Pension Fund Forum (LAPFF). LAPFF is the UK’s leading collaborative shareholder engagement group with combined assets of over £250 billion. LAPFF enables local authority pension funds to work together to achieve the best outcomes for their members, local communities, council tax payers and the wider economy. 

We also participate in, are a member of, or have signed up to the following initiatives:

  • The Stewardship Code
  • The Principles for Responsible Investment
  • The Institutional Investor Group on Climate Change
  • The Carbon Disclosure Project
  • The Transition Pathway Initiative
  • Investing in a Just Transition
  • The 2018 Global Investor Statement to Governments on Climate Change
  • Climate Action 100+
  • Workforce Disclosure Initiative
  • Pensions for Purpose

The PIRC Stewardship Report for 2022/23 is now available. This reports against the Stewardship Code, presenting what has been done and the impact.

What is GMPF doing to go ‘carbon neutral’?

We are concentrating our work on the following:

  • Moving money from some of our existing investments into low carbon or carbon neutral investments.
  • Increasing the amount of money we have invested in renewable energy initiatives and those that focus on ways of generating green energy.
  • Using our influence as a shareholder to vote through changes that will support a company to become carbon neutral.

Why doesn’t GMPF disinvest now from some of the investments that are known to be high in carbon emissions?

We believe that we have a responsibility to those that would be affected if we were to disinvest suddenly. We believe we should move to a carbon neutral position responsibly. The industry refers to this as carrying out a just transition.

People’s livelihoods could be affected if we were to withdraw our investment in a company suddenly. It could affect those workers directly employed by that company and could also affect their local community or people working for other companies who rely on them. 

If new investors were to take our place, there is no guarantee they would place the same amount of importance on climate change matters as we do. Therefore, we prefer to use our influence as a shareholder where we believe this will deliver results, rather than completely withdrawing our investment.

We have signed up to the investing in a just transition initiative. This initiative, by the London School of Economics and Political Science, is to support investors like us to make decisions and take actions that will be in the best interests of workers and communities while achieving carbon reduction targets.

When looking to invest in a company, how does GMPF determine if that company is being run well?

As a minimum, we expect to see that:

  • there is a clear division of responsibilities across company board members
  • the company board can demonstrate they can make independent decisions
  • the chair of the board and the chief executive have distinct roles and duties
  • the board is diverse and can demonstrate a commitment to diversity and equality at all levels throughout the company.

As a shareholder in a company, we will use our voting rights to achieve outcomes that match our approach to responsible investing. We have voting guidelines that inform how we cast our votes and we keep a record of these. 

Local authority funds can exert a significant amount of influence on companies with whom they invest, particularly when acting together. We do this to benefit our members, local communities, council tax payers, the wider economy and all members of society.

GMPF Investment holdings

What are holdings?

Holdings are the contents of an investment portfolio held by an individual or entity, such as a mutual fund or a pension fund. Portfolio holdings may encompass a wide range of investment products, including stocks, bonds and mutual funds.

GMPF publishes a full list of its holdings each year when its annual reports and accounts are signed off. In addition, GMPF will publish listings of private equity and venture capital funds, infrastructure investments and funds within the special opportunities portfolio quarterly, normally six months after the relevant quarter end.

GMPF Voting activity and records

GMPF's approach to proxy voting is described at Section 10 of the Investment Strategy Statement.

GMPF has delegated the exercising of voting rights attached to its direct holdings to Pensions & Investment Research Consultants Ltd (PIRC). PIRC are an independent corporate governance and shareholder advisory consultancy that advises and provides research to GMPF on governance and other ESG issues. This will mean that GMPF’s votes are typically cast in line with PIRC’s voting policy. This aligns GMPF’s approach with that of its pooling partners, Merseyside Pension Fund and West Yorkshire Pension Fund, enabling a shared voice on corporate governance issues. With this delegation, GMPF's voting record is predeclared and provided online. In addition, below we provide a quarterly summary of PIRC’s voting recommendations for the latest 12 month period, which includes the rationale for all votes against company management.

In order to track the performance of various regional equity indices, the appointed external passive securities manager, Legal & General, holds shares in thousands of companies around the world. In the normal course of events, Legal & General typically implements its own voting policy for GMPF.  However, it may vote the relevant holding according to GMPF's instructions on a case by case basis should GMPF so require. More information on Legal & General’s voting policy and records can be found on their website

 GMPF quarterly proxy voting review:

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