people collaborating at a table

Local Government Pension Schemes

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Why BlackRock for LGPS?

Our LGPS clients are a priority group for BlackRock, having managed their assets for almost 50 years. Today, BlackRock manages over £24 billion of assets for 55 schemes and 7 pools.1 We strive to provide the highest level of service and have built a 6-person dedicated team to maintain/service relationships at the Pools and the Schemes.

Our LGPS clients have allocated their assets across BlackRock’s passive, active and alternative investment platforms in addition to leveraging our transition capabilities as they transfer their assets to their Pools. We aim to work closely with the client to ensure that they achieve their respective investment objectives through our products and solutions as well as fulfilling their operational requirements. For this, transparency and communication with the client within an agreed process-driven framework is paramount to its success.

We recognise the increasing demand for reporting, disclosure and transparency and work with our clients to ensure these are delivered in an efficient manner.

Commitment to education and training

We hold a variety of dedicated local authority events throughout the year, where we seek to share our insights to broaden our clients’ knowledge. These include conferences, smaller training sessions and online training. We also provide free training to Investment Panel members on a wide variety of topics to educate and inform our clients on key investment issues facing local authority pension funds.

Source: BlackRock as of 31 December 2023.

Watch: Investing in the UK's transition to a low- carbon economy

We’re visiting companies we invest in, on behalf of our clients, to see how they are developing innovative solutions that could transform their industries right here in the UK. Watch the videos to learn more about synchronous compensators and smart meter technologies.

Current Time 0:00
Loaded: 0%

Peter Raftery:

A reliable and efficient electricity grid is a cornerstone of modern life,

and the UK has embarked on an ambitious plan to transition to a net zero emission electricity grid.

That transition requires why the use of renewable domestic sources like wind and solar, as well as deeper changes to how the grid operate.

And we're investing in that transformation.

This evolution must take place without compromising the stability of the power grid.

And that's why a technology known as a synchronous compensator comes in.

It's essentially a large rotating motor that works like a shock absorber for the grid.

By maintaining the voltage levels and frequency, the grid needs to run smoothly.

On behalf of our clients. We're investing in a new synchronous compensator at the Black Hill substation in Scotland,1

adjacent to the substation for the Beatrice Offshore Wind farm, one of the largest in Scotland, with 84 operational turbines.2

The investment will benefit from a ten year inflation linked contract3

that that's part of the National Grid Electricity system.

Operator Stability Pathfinder two Program.

This is the single largest contract in the program and accounts for 60% of the local short circuit level requirement in Scotland.4 and a significant portion of the system inertia support for the wider GBE grid.

The synchronous compensator is an investment in the people who live and work here and in the economic future of this region. Much of the technology that's essential to the ongoing evolution of the UK's power grid is produced right here in the UK.

at GE Verona’s Factory in Rugby

Andy Cooper:

A synchronous condenser sits alongside power grid in areas where a grid might be a little unstable, and it can provide energy into the grid, whether that's short circuit capability or inertia to help prop up the grid.

So they're especially useful in areas where the grid is dependent on a higher mix of renewable energy.

And as we know, with solar, with wind, weather can change conditions. these machines can help to keep that grid stable in a kind of way. They replicate the big generators that used to exist in those thermal power plants.

the more and more renewable energy that comes onto the grid, the more we're going to need solutions like synchronous condensers.

I think the really good thing about them is that they're quick to build. We can deploy them at scale around the UK at relatively small sites and we can position them close to where the grid instability is.

if we take the project, we first started talking to customer back in middle of 2022 and we got into contract a little bit later that year. The first machine has left the factory today, it'll take until Q4 of this year to bring it online, fully installed, fully commission.5

So, if you put all that together, it's around two and a half years from really starting to talk seriously about it, to get it into operation.

these machines used to be used for power generation from fossil fuels in the oil and gas market. We're repurposing that design and we are reusing it alongside power grids to support the path to net zero.

It's already proven.

So, it's low risk. It's something we can deploy into the field quickly and at scale. sitting here in Rugby. We're really the last factory of this with this size capability in the UK. I think it's extremely important for the UK to develop the sort of solution domestically within our shores, build their skills, build that capability.

and build the future.

The futures electric.

1 Source: BlackRock as of 22nd February 2024
2 Source: BlackRock as of 22nd February 2024
3 Source: BlackRock as of 22nd February 2024
4 Source: BlackRock as of 22nd February 2024
5 Source: BlackRock as of 22nd February 2024

MKTGH0724E/S-3733842

  1. Watch: The role of synchronous compensators in the UK's transition
    Now Playing
    Up NextWatch: The role of synchronous compensators in the UK's transition
  2. Watch: A day in the life of a Calisen smart meter engineer
    Now Playing
    Up NextWatch: A day in the life of a Calisen smart meter engineer

Peter Raftery:

A reliable and efficient electricity grid is a cornerstone of modern life,

and the UK has embarked on an ambitious plan to transition to a net zero emission electricity grid.

That transition requires why the use of renewable domestic sources like wind and solar, as well as deeper changes to how the grid operate.

And we're investing in that transformation.

This evolution must take place without compromising the stability of the power grid.

And that's why a technology known as a synchronous compensator comes in.

It's essentially a large rotating motor that works like a shock absorber for the grid.

By maintaining the voltage levels and frequency, the grid needs to run smoothly.

On behalf of our clients. We're investing in a new synchronous compensator at the Black Hill substation in Scotland,1

adjacent to the substation for the Beatrice Offshore Wind farm, one of the largest in Scotland, with 84 operational turbines.2

The investment will benefit from a ten year inflation linked contract3

that that's part of the National Grid Electricity system.

Operator Stability Pathfinder two Program.

This is the single largest contract in the program and accounts for 60% of the local short circuit level requirement in Scotland.4 and a significant portion of the system inertia support for the wider GBE grid.

The synchronous compensator is an investment in the people who live and work here and in the economic future of this region. Much of the technology that's essential to the ongoing evolution of the UK's power grid is produced right here in the UK.

at GE Verona’s Factory in Rugby

Andy Cooper:

A synchronous condenser sits alongside power grid in areas where a grid might be a little unstable, and it can provide energy into the grid, whether that's short circuit capability or inertia to help prop up the grid.

So they're especially useful in areas where the grid is dependent on a higher mix of renewable energy.

And as we know, with solar, with wind, weather can change conditions. these machines can help to keep that grid stable in a kind of way. They replicate the big generators that used to exist in those thermal power plants.

the more and more renewable energy that comes onto the grid, the more we're going to need solutions like synchronous condensers.

I think the really good thing about them is that they're quick to build. We can deploy them at scale around the UK at relatively small sites and we can position them close to where the grid instability is.

if we take the project, we first started talking to customer back in middle of 2022 and we got into contract a little bit later that year. The first machine has left the factory today, it'll take until Q4 of this year to bring it online, fully installed, fully commission.5

So, if you put all that together, it's around two and a half years from really starting to talk seriously about it, to get it into operation.

these machines used to be used for power generation from fossil fuels in the oil and gas market. We're repurposing that design and we are reusing it alongside power grids to support the path to net zero.

It's already proven.

So, it's low risk. It's something we can deploy into the field quickly and at scale. sitting here in Rugby. We're really the last factory of this with this size capability in the UK. I think it's extremely important for the UK to develop the sort of solution domestically within our shores, build their skills, build that capability.

and build the future.

The futures electric.

1 Source: BlackRock as of 22nd February 2024
2 Source: BlackRock as of 22nd February 2024
3 Source: BlackRock as of 22nd February 2024
4 Source: BlackRock as of 22nd February 2024
5 Source: BlackRock as of 22nd February 2024

MKTGH0724E/S-3733842

Learn more about LGPS at BlackRock

Investment strategies Latest insights Meet our team
Paragraph-2
Dynamic Article List-1
Paragraph-3,Bio-1,Bio-2

The full range of our asset capabilities is reflected in our solutions - The LGPS’ requirements from their managers will continue to evolve thus BlackRock continually engages with the Pools and Schemes to assist them in future proofing their investment strategies and allocations.

Sustainability

As a fiduciary to our clients, we know how important Investment Stewardship and Sustainable Investing is for the LGPS community. BlackRock have the largest stewardship team in the asset management industry with unique expertise to engage with companies on governance and business models long-term financial sustainability.

In addition, BlackRock's Sustainable Investing platform team was launched in 2015 to unify BlackRock’s approach to sustainable investing and serve investors who seek solutions that deliver targeted sustainability outcomes. Since then, the team has built out a global suite of sustainable investment strategies, ranging across asset classes, vehicles, and investment styles. We work closely with both teams to align with the LGPS’ investment and sustainability strategies.

Find out more here - Sustainable & transition investing with BlackRock

Alternatives

With a challenging economic outlook, investors need to understand the drivers of portfolio returns and apply the right blend across index and alpha strategies to build resilient portfolios.

As a core strategic building block, alternatives bring diversification and long-term risk adjusted returns to the well-balanced portfolio of the future.

Find out more here - A Guide to Alternative Investing | BlackRock

Index

At BlackRock, our approach to index investing is anything but passive. We understand that investors today demand more efficient returns and innovative ways to use index strategies.

Find out more here - https://www.blackrock.com/uk/professionals/solutions/index-investing

Current Time 0:00
Loaded: 0%

For professional clients only.

Our case for UK Equities

Luke: Hi, I’m Luke Chappell
Sam: Hi, I’m Sam Brownlee 
Luke: When I started my career in UK equities in 1990, pension funds and insurance companies owned half of all UK listed shares and that has meaningfully reduced, driven by legislation, regulation and accounting standards - now just 4% of UK listed shares are owned by pensions. (Source HSBC, ONS 30th April 2024)
Three decades of persistent selling should be coming to an end - Is that enough though to improve the outlook – where’s the marginal buyer coming from?
Companies are buying themselves – share buy-backs are shrinking the market every year - and the UK offers a relatively high dividend yield. (Source HSBC, ONS 30th April 2024)
And companies are buying other companies – M & A has been seen across many market sectors – Banks, Mining, Housebuilders, Insurance, Technology - and, whilst some deals haven’t reached fruition, they have highlighted the attractive valuations in the UK market
We don’t expect accounting standards to change, insurance regulation to be undone, or the Pensions Act to be overturned, but we have seen greater political scrutiny of the allocation by public pension schemes to UK equities. (Source: Morningstar, Budget Pensions news article, 6 March 2024)
And we should see buyers from overseas, attracted by the valuation discount at which many UK shares trade relative to their global equivalents; but lowly valuations haven’t been enough to attract buyers in recent years, so what’s different now?

Sam: Brexit has created headwinds for companies – regardless of the view of the outcome or the economic impact, this has increased (the perception of) sterling volatility and hence the cost of equity – and that might change for the better with a period of political stability
This matters more for some businesses than others – it shouldn’t impact a high quality analytics company or large pharmaceutical business at all whereas it’s clearly more important for a domestic bank
And there are some better signs for the UK: economic surprises are positive, household incomes in aggregate continue to grow in real terms with consumer confidence making new highs; and investment has been boosted by fiscal incentives
We now feel more than ever that the UK market is ripe for stock picking
The UK market is concentrated both at the stock and sector level
Our preference is to focus on long term growth compounders – quality businesses that thrive in all environments.

Risk Warnings

Investors should refer to the prospectus or offering documentation for the (fund’s/funds’) full list of risks.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time and depend on personal individual circumstances.

Important Information

This material is for distribution to Professional Clients (as defined by the Financial Conduct Authority or MiFID Rules) only and should not be relied upon by any other persons.

This is marketing material.

In the UK and Non-European Economic Area (EEA) countries: this is Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. 

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. 

© 2024 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, and iSHARES are trademarks of BlackRock, Inc. or its affiliates All other trademarks are those of their respective owners.

MKTGH0624E/S-3661657
MKTGM0924E/S-3887474

Our case for UK Equities

Hear from Luke Chappell and Samantha Brownlee, Co-Portfolio Managers on BlackRock’s UK Fundamental Equities platform.